Its leaking water. The water pump is working fine but water also comes running out of this hole while the water pump is pumping. Sometimes it will stop for a few seconds but then it starts running out again. The water pump keeps pumping out the back like it should.
I would say that it’s a fault in the casting. You may have to replace that side, if it is going to create a problem. As was stated: it shouldn’t be leaking at all.