Why is this dimension in a rectangle? What does it represent?
It's a Basic dimension. You should see a GD&T tolerance box close by that defines the allowable limits.
What is meant by "basic"? Is it not as significant as a typical dimension?
A typical dimension is controlled by the default tolerance box. A Basic dimension is exempt from the defaults. It is used as a "theoretically perfect" dimension and tolerances are specified using a geometric tolerance box that defines circularity, flatness, etc. Look up GD&T for a better-worded explanation.
They are nominal dimensions, without any implied tolerance. They can be chained together without any impact to tolerances. Double dimensioning issues do not apply to basic dimensions, so they can be repeated as needed in any view. They link datum features to other features with GD&T tolerances.
That might be shown as GDT base dimension indication.
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