What is this and why would it be there?

It wasn’t leaking before. what performance level will the motor be? Street car, stockish build. I would take “yes” for an answer and leave it be. Moderate to higher level hp, I might start looking for new block either way I wouldn’t touch the epoxy. It worked fine for stock rebuild use it for that or keep it until you can use it that way. If you can talk to the last owner and find out how longs its been that way might help you decide. If its be there for years why poke a sleeping dog?