Google started including the security patch version in the About Phone menu last year in the wake of the Stagefright vulnerability. This is simply a date that tells you which patch level a device runs. As of Android 7.1, that line in the settings is more than just a date. It's also a link to the security bulletins.

The patch level lists the date of the security patch itself, not the date it was installed. For example, the current patch level for Nexus and Pixel devices is October 5th. If you waited until today to install the latest security patch on your Nexus, it'll still say October 5th for the patch date. In Android 7.1, you can get more information about the patch by tapping on the date.

Tapping the security patch date opens a new browser tab to the main list of patches on the Android website. You can see all the monthly updates in the table on this page—each one includes the specific vulnerabilities that were addressed. It's handy if you want to find out what has been patched each month