it was originally intended to be an oil line, but rotax decided to pack the outer bearings with grease instead of feeding them oil all the time. not sure why, who knows but the engineers who made the decision. So rather than retool and build the cases differently they just cap the fitting off.
What should happen every 2000 miles or so is split the case halves and replace the Isoflex grease that the bearings are packed in. This will help the bearings last longer.