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Based on the state of our current roads with pot holes etc I'd get that replaced. I've had a few sidewalls bulge after hitting a pothole so god knows what the damage would be if you hit the weakest bit of the tyre with a chunk out it at 70mph.
I'd keep a very close eye on it but if it stays like that then I'd stop worrying. Whether thats correct or not I dunno, buts its what I'd do! First sign of a bulge it can gtf