Hi Browserice, Welcome to the Forums,
DigitalGreenTea’s answer is perfect. And you should never delete that level (or anything from Engine Content).
But to answer ‘Where exactly is this level?’ (Template_Default, OpenWorld) You can enable ‘Show Engine Content’ in the content browser settings. You’ll now see the ‘Engine’ folder alongside ‘Content’ with plenty of interesting assets that are included with the engine.