It does not require air holes.
This fake butterfly toy is made by Gemmy Industries. The butterfly looks real and reacts differently if you tap on the top of the jar. It can flap or fly around the jar. One source is ThinkGeek>>
(I suggest you turn off the sound of the voiceover if you watch the video below.)
The Fake Butterfly
It's a clever design using (SPOILERS) a fine wire attached to a motor that, depending on its speed, makes the butterfly move only its wings or flutter around the jar. What sells the illusion is the seemingly randomness of the butterfly's movement, plus the invisibility of the wire behind the glass.
If this had been invented years ago, it might have been exhibited onstage as "The Eternal Butterfly".
One famous magical butterfly illusion from the past was called The Mascot Moth. It was performed in the early 1900s by magician Harry Keller and was infinitely more complicated since it involved the visible onstage vanish of a woman dressed as a butterfly... without any covering at all.
The Butterfly Collection, Gemmy>>