It's a custom mezanine slot for a riser Gigabyte no longer sells. The normal purpose of a slot like that is more direct integration with the motherboard itself vs going over the PCI Express bus. It's usually used for network adapters but also sometimes storage controllers.Never did figure out what that other weird half size PCIE connector is that's next to the actual full size slots, though.
When it is used on this motherboard it occupies the half height PCI Express slot. This was very stupid design choice. They revised it for later servers to match how most other manufacturers do things. In most cases the mezzanine adapter has its own slot and most manufacturers have a cutout on the motherboard's PCB that allows the card to fit below a PCI Express slot in a 1U configuration. It's a shame they didn't do that here, as they almost had a 1U server with 5(!) expansion slots. That is if you count the unused one where you can fit a single NVMe drive only...
I actually found a riser that works in the slot (Dell makes one) as I was curious and attached a Quanta mezzanine storage adapter and it actually worked without issue. However, losing the flexibility of the PCI Express slot isnt worth it at all in this server.