Pic 2 looks like they started to drill it with a core drill. A hollow cane with abrasive flint powder. That's the way they drilled bigger holes like in bannerstones. Here's a pic of a bannerstone I started to drill. Gary
I've had a hunch it was natural, but it's one strange natural piece, haha. It's made of clay, and I just can't figure out a way that it could have formed like that.
Its a root with clay formed around it, and now the root is decaying. Usually we see hollow ones with the host to form the concretion gone. Keep searching.