Unused Level 3

Unused Level 3 (or Donjon/Funhouse) is an unused level found in the July 25th 2020 leak. It is some kind of enclosed maze-like circus level with no objects or enemies whatsoever. It is very bright and colorful, using multiple textures. It was documented by Marionova64 on July 26, 2020. Its level binary filename is named 3KINOP and its internal name is donjon.

Theories
Kinopio is the Japanese name for Toad. 3KINOP appears to have a shortened version of that word in its name; this could mean that the area would have contained Toads. Since it looks to be an indoor location, this may hint that this area might have actually been an early version of a room inside the castle, since Princess Peach's Castle was also the only area in the game that was home to Toads.

Donjon is a romanized Japanese word meaning castle, or a great tower. This is also evidence towards it being an early version of Princess Peach's castle, since the internal name refers to a castle, and Princess Peach's castle is the only castle in the game.

Since it's the third level, it was most likely made very early in development. A hub world would typically be created early on in development to house entrances to worlds. A mural is a painting created on a wall; since this level has multiple murals in it, it might have been a early hub world, where Mario was originally going to jump into certain murals in the area to access worlds.