This entity is designed to link two separate, distant areas together without any clear transition between the two. This entity is exclusive to Portal 2.
It is used in Chapter 9, in the Chamber 75 Death Trap with all the crap turrets. The room is actually completely separate from its supposed surroundings. It is the only use of this entity in the final version of the game, though commentary states that it was used often during the development of the title to link chambers together.
"...tweaks to existing levels. When we started the project making any big structural change in a level or the order of levels would lead to hours or even days of busy work trying to reconnect things and make sure they lined up again. If we ever wanted to ship something the size of Portal with the finely tuned balance we desired then we needed a way to be able to make big changes to the layout of the game without paying the cost of making everything line up again. We needed a way to bend space. We needed to think with portals. Using portals to connect different areas in the world we could make any type of impossible space work out. You could look through a hallway into the next room but the hallway might be on the other side of the map and the room you are looking into might be in a completely different orientation. We could seamlessly insert an elevator, a huge expansive vista, a room that was bigger on the inside than the outside, or even create an infinite fall by connecting a shaft back into itself. Soon every connection between any space was a portal. We would even switch them on the fly. Even a simple door worked like the cartoons - just a facade painted on a wall that seamlessly opened somewhere else entirely. Once the game settled down we were able to finalize our path and remove all of the world portals. There's only one impossible space left in the whole game - see if you can figure out where it is." -Eric Tams in the Portal 2 Developer Commentary.