In an otherwise sealed bottle with a single small hole in the side, the pressure due the height of the liquid (h) above the hole and the pressure in the air gap at the top of the bottle ($P_b$) has to be equal to atmospheric pressure ($P_a$) so that there is pressure equilibrium at the side hole.
$P_a = P_b + h \rho g$
where $\rho$ is the density of the water and g is the acceleration of gravity.
If there is a straw that is open to atmosphere with its lower end near the bottom of the bottle, the liquid level inside the straw drops until it reaches a level equal to the height (y) of the hole in the side and the atmospheric pressure acting on the top of the liquid in the straw is also equal to $P_b + h \rho g$.
If the straw is raised until its lower end is above or equal to the height of the hole in the side, air will enter and $P_b$ rises and water starts to flow out the side hole.
This equation is simplified, because it ignores the pressure $P_t$ due surface tension in the surface of water in the side hole and the pressure $P_s$ due to tension in the meniscus of the water in the straw.
Surface tension pressure at the hole is now
$P_t = \frac{2T}{r_h}$
where T is the surface tension of water (0.072 N $m^{-1}$) at the side hole and $r_h$ is the radius of the side hole. Ref: Related paper.
the extended equation for pressure equilibrium at the side hole is:
$P_a + P_h = P_b + h \rho g$
which means at equilibrium the height of the water above the hole is
$h_1 = \frac{P_a - P_b + P_h }{\rho g}$
Surface tension at the meniscus in the straw is similarly:
$ P_s = \frac{2T} {r_s}$
where $r_s$ is the radius of the straw.
the extended equation for pressure equilibrium at the meniscus inside the straw is:
$P_a - P_s = P_b + h_s \rho g$
which means at equilibrium the height of the water above the straw meniscus is
$h_2 = \frac{P_a - P_b - P_s }{\rho g}$
The level where air starts entering the straw when it is raised is therefore $h_1 - h_2$ and this is slightly above the height of the side hole.
For practical purposes, the pressure due to the meniscus in the straw is pretty small because of the larger radius and surface tension of the side hole can be ignored for holes with greater than 2mm radius. However, as the paper points out, the surface tension pressure of a side hole of 1mm radius is significant and water stops flowing when the level of water is about 15mm above the side hole and the pressure in the bottle is atmospheric.
I notice you have fluid dynamics tags on your question. If you are interested in the fluid flow rate versus head height and hole radius this is already adequately covered by the paper linked in your question.