In addition to being open into the water passage, it really doesn't look like the drilled hole was where it was suppose to be. If the hole is not properly located, then anything you put there for a thread insert will not match up to the hole in the VC. The through hole looks to be more then 1/4 of the bolt diameter off from where it looks like it should be to me. Setting a good valve cover on the head would confirm the position of the hole being off far enough to cause a problem or not.