Dancing Flowers

The Dancing Flowers is an unused object related to an unused environmental setting in Super Mario 64. The animated graphic of the flower goes unused in Super Mario 64 since the environmental setting is never used itself.

In Super Mario 64, some areas have environmental effects that create particle effects in the stage. In Cool, Cool Mountain and Snowman's Land, a snow effect creates the falling snow particles seen in-game. In Lethal Lava Land, an lava effect creates the lava bubbles that pop up and explode seen on the lava. There are, however additional unused effects in Super Mario 64, one of these being the dancing flower effect. The dancing flower effect creates these dancing flower objects spawn on nearby planes to Mario.

Theorising
Bizarrely, the graphic for the unused flower is coupled with the rest of the graphics for Lethal Lava Land. This is odd since Lethal Lava Land, being an area primarily comprised of lava and volcanic structures, would not be suited for any plant life. It's possible that this is just an error upon the developer's parts, or that Lethal Lava Land was originally home to a more vibrant stage that would feature these flowers.