The patty is very old and moldy. When eaten, it will give you severe food poisoning. When SpongeBob takes it out from under the grill, he describes it as cold and hard and knows that it is quite possible that it rolled under there years ago.
Role in episode
During closing time, SpongeBob finds the patty under the grill and he throws it away but is quickly stopped by Mr. Krabs. SpongeBob tells Mr. Krabs that they should throw the patty away, though Mr. Krabs tells him that he cannot make another Krabby Patty until the rotten patty is sold. Squidward finds out about the order and was disgusted by the patty before trying to sell it to a customer who fled in horror.
Weeks later, the patty is not sold to any customer because it is already spoiled and inedible. Mr. Krabs wondered why as Squidward angrily tells Mr. Krabs that the patty has gone bad, but the stubborn Mr. Krabs ignores him. The patty has become sentient enough that it barks like a dog while being kept inside a cage. To prove SpongeBob and Squidward wrong, Mr. Krabs takes a bite of the patty and then turns green due to food poisoning, being sent to the hospital afterwards. Despite that, Mr. Krabs still asks SpongeBob to wrap up the patty as he still thinks it's edible. However, he seems to realize it after the doctors panic at his results and his visit from the Flying Dutchman.