The knot is an area in the Core.
The knot is unique in the subnet in that it is the only place that is confirmed to still exist in all seven main layers. The only other place to do so is Sector 9, but it may very well be that Sector 9 is part of the knot.
The knot is a perfect result of the Plan, which was a large-scale attempt to experiment with the effects of using karma-infused building materials to make "anti-structures". Anti-structures, such as the temple, the pyramid, and the Winter Palace use karmic energy to exist in multiple layers, or alternate realities condensed into one space. Several locations in the knot share almost-identical structural layouts, with only minor differences between layers.
Since the layers occupy the same space, they are in a state of superposition, so that they have corresponding geotags. The gallery below shows all eight layers of one specific spot, to show the clear breakdown of this superposition.
The knot is the one place where people who were angry at Murtaugh for deserting their coworkers in the Outer Rim would be able to seek revenge on him in whatever way they deemed necessary. It was also a good place for Murtaugh to pick as a destination, since he was trying to escape the subnet altogether after invading the Core. Many thought he was out to get revenge on a group of people who tried to bury him in the lighthouse. Elizabeth wanted to get to the fifth layer to warn them, and the knot was an easy spot to do so.
Everyone converged on this spot, and when Murtaugh arrived he suffered a massive change of perspective as he realized the damage he had done with his experiments with karma. Elizabeth protected him from people who quite possibly wanted to kill him.
After the tension died down, Murtaugh spent the rest of his life trying to undo his damage, and over time people who resided in the knot grew to respect him and even commemorate him alongside Elizabeth when they both died, by burying them in the sacred temple.