In my opinion, based on my experience only, I tend to judge the health of euphyllias by the flesh wrapping around the edge of the skeleton. Although, I have some that have lived for a long time with no flesh at all wrapping around, just the tentacles or whatever you call them, so that's not a black and white gauge. The ones that are starved for light are usually the ones that start losing tissue in that area,
I would be more interested in the change from here now that you noticed something odd.
The question is....how did it get there in the first place? Did a fish take a bite out of it? My hippo loves to chomp on my LPS but they usually grow back pretty quickly. If the head has an infection or is starting to degrade, then you will see that hole start to grow larger.
Don't focus so much on the hole right now. A healthy torch will repair itself. If it's not healthy, the hole will get larger. Depending on the size of the colony, you might try a 10-15 min dip in Lugols to rid any bacteria that might be trying to form. Try to position it to where you can not only watch it, but there is a little flow to keep anything like bacteria from harboring in there. Worst case, you might have to amputate that head before it gets a bacterial infection and risks spreading to the other heads.