I don't know what it is for and Jlreyna could be right. As for needing it I don't use one , my TRW aluminum water pump never came with the fitting and later when I switched to my blower intake it too never had the fitting.
So both TRW and Weiand both decided I don't need that fitting.
it is there to allow water to circulate before the thermostat opens. if you are racing and using a restrictor instead of a thermostat you should block it because it allow too much water to bypass the rad.