A general-purpose proxy protocol that forwards arbitrary TCP connections rather than just HTTP, which means it can carry anything — mail, SSH, game traffic. SSH can create one with a single command-line flag, which is why it is a common ad-hoc way to route traffic through another machine.
An open SOCKS proxy lets anyone route traffic through your address, and they will — for spam, for fraud, and for attacks that then trace back to you.
An open SOCKS proxy will be found and used for traffic you do not want attributed to your address. Either restrict it by source address or close it.
The port scanner will tell you whether 1080 is reachable on a host you control. Checking from outside your own network matters: a port can be open on the machine and still be blocked at the firewall, and it is the view from the internet that decides whether anyone else can reach it.
Only scan hosts you own or have permission to test.