It may have been a knot tied at the factory in skeining up the yarn. Usually people cut them out and join in another way. I test them - if they slip a little I'll cut and reknot (because my knots don't come undone and I anchor them so they don't move), if they don't, I leave them. I don't like knitting the ends overlapped, I think it's too bulky, even with thinner yarn and a loose gauge.
That looks better than great! You seem to be doing fine job of keeping even tension. What kind of yarn is it? The yellow is very cheerful, nice in the winter.