The microwave bag is an alternative to clean your menstrual cups in the microwave instead of boiling them in a pot. Unfold the bottom of the bag, add 60 ml (2 ounces) of water and your menstrual cup, follow instructions on the bag and for your microwave. A few minutes later you have a steam cleaned menstrual cup, ready for your next period.
The hole at the side of the bag is intended to be there. It's supposed to let steam out, so that the bag doesn't become over pressurized. When the steam cleaning is finished, wait a few minutes before removing the bag from your microwave - make sure to always use the "Safe Zone"-grip.