They are referring to a cylindrical hole or any non-tapered hole (i.e. "square" in the sense that the walls are perpendicular to the bottom).
I've also heard that a "keyed" hole works well- a hole that flares outward toward the bottom traps the solid chunk of asphalt inside.
I believe keying is now generally discouraged since it necessarily involves weakening “good road” around the pothole by undercutting it and replacing it with cold mix, which is fundamentally weaker stuff.