This is what is known as a crush zone on the frame rail of a vehicle. It is designed to collapse when it takes a impact hard enough to cause it to collapse. It is designed to absorb energy, think of jumping off the roof of your house onto a trampoline vs onto the driveway. The trampoline will absorb some of the energy kinda like a crush zone on a frame rail. If the frame rails were solid, it would be like jumping onto the concrete. Crush zones also help deflect the damage front entering the passenger compartment. When a crush zone on a frame rail it damaged, like in the picture, it requires replacement. If not done correctly it will compromise the safety of the vehicle were it to be in another accident.