This secret area with an opened supernatural vortex is called the Hidden Portal. A bridged area and ruined towers (that are in fact the "Choose Your Destiny" towers) can be seen in the background and a portal in the sky. The backdrop is actually the backdrop of the "Choose Your Destiny" screen of the original Mortal Kombat 3, with lightning striking in the center of the portal, and the bridge from the Pit III stage is provided as a walkway for the kombatants to fight on.
This arena is also known as "Smoke's Portal", since it is accessed when fighting against Smoke via Kombat Kode in the first version of Mortal Kombat 3 (only if the Ultimate Kombat Kode has not yet been entered). Its only later appearance was in the Nintendo 64 version of MK Trilogy. It is also part of the Portal arena in Mortal Kombat: Deception.
In Mortal Kombat: Deception, the "Choose your Destiny" towers in the background can be seen more clearly; they now have some characters' pictures on them.
"Choose your Destiny" background in Mortal Kombat 3.