I am with KTPhil, what did you think it was? a rag container? don't see too many of those these days. If you didn't know what it was, which I am fine with, why would you stuff a rag in it? "Gee I don't know why this hole is here or what it could possibly do, let me cover it up."
For Tony MS, not to ask the obvious of why would BBs be stored under one's hood, but how would they get past the air filter?
Sun -- not to be an A#* but the dealer is inept, uhh you put the rag in the intake, not them. I gotta think that is somethint they or I wouldn't even think to look for, "let's see car won't run, its got gas, key is in the ignition, OK Bill, let's check the intake for any lose rags, that is often the case with these darn Prius". And unmarked, do they have to label everything? The gas tank doesn't say gas tank, should I store my lit cigarettes in there? What protection are you looking for? You should never leave anything under the hood, even outside the intake. It could get sucked into the intake while under way. Could get tangled in a belt or pulley. Off the top of my head I can't think of any car I have ever looked at that had something over the intake in the way of protection, at least something stock. I am guessing the Prius phone line person hung up and said to his buddy, while laughing uncontrolably "wait no, you won't beleive this one! I got a guy who put a rag in the intake, and thinks it is our fault. That totally beats your guy who threatened to sue if he got into an accident while he watched the screen instead of driving and waiting to flawlessing his car."
Why do we expect the world to protect us from every conceivable problem? Do we really want the world covered in NERF? Now next time I buy a car will I have to sign a waiver to discuss that I have been advised on the placement of my air intake and another to say I know how to adjust the mirrors? That I shouldn't stick my wet finger in the lighter socket or drink from the gas tank?
I'd be disapointed if Toyota reimbursed you for the car rental and hotel.
Spike