Funny you should ask that guys! The first thing I did was put a rag to it and examine it for a while. Then being the pyro that I am I decided to see if it was flammable. No go. I'm pretty much convinced its water.
The hose, if your interested is towards the passenger side of the engine compartment on the right side of the tranny (if you looking towards the front of the vehicle). It wraps itself up in the compartment then disappears into the back of the compartment (I assume it heads into the cabin somewhere). The actual cut is a diagonal slice forming a 'V', so I know it was intentional.