This is 700x25 continental Ultra Sport II
I noticed there are two holes in both tires, and wonder if this is a manufacturing fault, or simply a wear indicator?
Yes, those are wear indicators.
The change is noted by retailers:
Note: Continental has added wear indicators to all Continental Gatorskin tires. These small divots in the tread surface are intentional and are not a sign of a factory defect. Once the rubber wears to the point where the divots are no longer discernible, you'll know it's time to replace.
This is a tread wear indicator, and is present on all modem continental tyres.
When the indicator disappears, it is time to replace your tyre.
see link directly from Continental: http://conti-tyres.co.uk/tread-wear
Highly likely to be a wear indicator. The Conti Grand Prix 4000s have them as well.