How do you test a connection with telnet? Isn't having telnet open a security risk?

I'm a data center tech at the moment and I frequently hear engineers on calls saying how their are testing a new connection with telnet. How does that work exactly? Does the telnet port have to be open on the destination host? I would assume that is a security issue.

I tried telneting to a server in my lab and I was only able to pick up a SYN + destination host closed connection in Wireshark.

I would appreciate if someone could clear this up for me.