While working on the motorcycle tonight I noticed that one side has a hole in the belt. It doesn’t go all the way through though. What would have caused this? A rock? Motorcycle has 25k miles.

https://ibb.co/PY5dBg6
https://ibb.co/gVMkhFz
https://ibb.co/J7Wp2DY

Should I replace or leave it alone as it doesn’t go though? I mostly ride around town…

I agree with Philly that it’s probably ok especially if you are only riding short casual rides.  My problem is that I’m a worry-wort, and knowing my belt had a gouge in it would always be in the back of my mind when riding.  

For a rock or something to dig a hole like that, the belt somehow grabbed the debris and carried it around to the pulley cover and engine case area where it got wedged and forced a bite into the belt.

Fumbling around with the little spacer bearings that go on the bolts at the bottom of the battery box, I once dropped/lost one of those dang bearings.  I search the floor for 15-20 minutes to find it.  No luck, so I reassembled without the darn bearing.  Finish what I was doing and went to push the bike backwards out of the garage and I hear this grind and the bike was hard to push.  That darn spacer bearing managed to find its way into the belt/front pulley area.  It left a nice dimple but it didn’t cut into the belt.  Felt lucky.  I guess the point of my story is to check your pulley and other components.  At the front side of the pulley, there isn’t much clearance between the belt and engine case.

Given our collective experiences with this belt, and the plethora of new, mid-size bikes, why don't more OEMs use them? Probably because changing ratios is a pain/impossible ?
Cheers!