OK, I'll stop it now.
The other guy got it right.
The water from the hole cannot squirt higher than the level of the water OUTSIDE the boat, meaning, it cannot go back out into the lake, ocean, bathtub, whatever. Simply impossible.
The reason soichiro said the boat would sink the way it was worded, hole or no, is that in order for the water from the hole to be able to go over the side of the boat, the side of the boat would have to be lower than the water level. Which means, the boat is already sunk, and no water would be coming through the hole anyway because pressure would now be equalized, due to said boat already being underwater.
Thats why this question was funny. It assumed an impossibility, possible.
If a chute dropped 1 coconut a second into a barrel, and 10 swallows carried one coconut each every 10 seconds back to the top of the chute, would the barrel fill up?
Swallows can't carry coconuts.