Yes, it's fine to pass null. The reason it even has this parameter is because it's implementing the ICryptoTransform interface. This interface can be used when constructing CryptoStreams because you might want to build up a set of transformations. In this case, HashAlgorithm doesn't change the data at all so it ends up funnily defined as just copying the input to the output.
Other implementations of ICryptoTransform (e.g. anything that actually performs encryption or decryption) would of course also be writing non-trivial output.
This means that, during a single pass over an input, you can compute the hash while also performing encryption - that's why this interface is supported here.
The current implementation just has this, after it's done its work:
if ((outputBuffer != null) && ((inputBuffer != outputBuffer) ||
(inputOffset != outputOffset)))
Buffer.BlockCopy(inputBuffer, inputOffset,
outputBuffer, outputOffset, inputCount);
ArgumentNullExceptionif the input buffer is okay - but doesn't explicitly talk about what happens with a null output buffer. Hmm.