What location is this? And why?

When you go to the lich machine, you can stumble upon it by accident. On the map, it looks like a branch with a circular hall (I'll post a screenshot when I can). Anyway, not-so-weak undead constantly appear there. I fought until, I think, someone of mine was killed and I had to bolt. In other words, there are very many of them, and new ones keep appearing as replacements. I still haven't been able to approach and see what that hole in the floor is where "endless ghosts" crawl out from—they wouldn't let me. The priest was trained up to Mage Guild—meaning "holy word" didn't just repel the undead.
I have a Lloyd beacon there, so I'll eventually venture over and take a look.