It's a floor joist with a large chunk rotted away... this pic shows next one along too, in much better condition & with fresh drill mark from where my first cutting hole was going to be.
Oh shit, it's so rotten that I couldn't see it! Yes, best option is to hack out and replace. If it were me, I'd take the slightly easier option of just cutting out the offending section and bolting on a brew section with brackets. Apply anti-wet-rot if you are paranoid.
What are we looking at here? A floor joist?
Shove a roughly 3mm wide blade screwdriver into it and see how far you can go.