Although it looks a bit like a marl pit, it is a natural spring. Here is a quote from a Garden State Environet article
" One spring-fed pool in the Winslow Wildlife Management Area, a short
walk from the Egg Harbor River, was famed throughout New Jersey as the
mysterious Blue Hole. Bubbling with artesian flow, the water was so
deep-blue and cold that it was reputed to be bottomless.
The spring spawned creepy folk tales about the Jersey Devil dragging
swimmers to their doom. Travel writers like Henry Charlton Beck came
to check it out in the early 20th century.
In his "Forgotten Towns" collections of rural New Jersey stories,
Beck included a chapter titled "Maybe a Meteorite," speculating on a
celestial origin for the 130-foot-wide round hole. Whether it was a
space rock or the last ice age that made the spooky pool, it's just a
ghost of its old self today.
"There it is: the fearsome Blue Hole," Demitroff said, peering into
the now-still pond, brown-green with dead leaves and algae."
Lowering ground water levels must have reduced the pressure that once
churned the sand bottom and kept water flowing, he said.