Anybody know why a small vent would be placed underneath a bay window?
Looks like a resounding NO. 
Was there a basement and a bathroom near by?
No, there was absolutely no reason I could think of it being there except possibly to ventilate the bottom of the bay window like an attic. A carpenter owned the house from new, 70’s vintage did a lot of nice work inside, but no clue when it came to mechanical stuff.
Any wood appliances nearby? If yes, then it could be a combustible air entry.
what was on the other side of this vent?next time when you give us pictures give us the inside and the out. Please?it could be someones fresh air concoctionfor all we know.
A place to hide the stash.
Is there no soffit under that bay window? That screwed on screen appears to be screwed to the bottom of the subfloor between the floor joists.
Was there a gas fireplace there previously?…or, some such? Odd, for sure.
Was that XPS or EPS surrounding the vent panel that I see?
White styrofoam, looked like the stuff sometimes used on foundation exteriors. Everything was outdoors
That sounds like EPS (Expanded Polystyrene) AKA bead board.
The venting brings back memories for that age where all contractors upon building a void, whether a bow window box, dormer, shed enclosed porch area had to be vented for some odd reason.
Sometimes in those years ago we did not know too much about building science.
We did what was the normal for those years and standard. As builders, we all learned by each other and learned by our own mistakes.
Now since the bottom of the bow window shelf is most likely not insulated, they provided the area to be ventilated.
As we all know, houses in the early 20 century had no insulation in the wall. Air leakage allowed everything to dry out and never caused a problem.
Anyways, adding the insulation at the bottom with the vent kind of created a moot point in insulating the void.
I would recommend a contractor to remove the siding and insulate the bottom of the window shelf properly and reinstall the enclosure with a smaller screened vent.
IMO, The builder might have been concerned about condensation. I see no harm. Just move on.