They are very similar to normal Krabby Patties from the exterior, but upon biting into one, they are clearly spray-painted to look like Krabby Patties, and the food itself is a gray substance from a patty-making machine.
Role in episode
They were made from a gray substance that comes out of a machine, heated and cooked in a furnace, and finally spray-painted to look like a regular Krabby Patty. Seeing the process sickens SpongeBob and Mr. Krabs and eventually, the latter reveals the interior of the patty to all of the Krabby O'Monday's customers. At first, the customers enjoy the patties, but as soon as they see what is inside, most of them flee the restaurant and barf it out.
People would notice the flavor of the patty changed dramatically, especially if they were regular patrons to the Krusty Krab, and since the gray substance was used for all of the components of the Krabby Patty (bun, patty, toppings, etc.)
The gray substance used to make one could be a reference to the pink slime that was falsely accused to be used in McDonald's food.