Skin Peach Corruption

The Skin Peach Corruption is a reported anomaly in Super Mario 64 in which Princess Peach's model would be colored to her skin color. This glitch is a graphical corruption, and the trigger point about it seems to be oddly specific. According to rumors, the Skin Peach Corruption would most likely occur if the player finishes all of the red coin stars in the course of the game (including secret ones), and beaten the final Bowser fight for the final cutscene to occur. However, some reported instances of the corruption occurring don't seem to have this requirement at all.

It has been falsely notified that this corruption is not one, and that it's a reward for the requirement above; being that Peach would present herself nude. The model itself remains the same mold, but the colors of the dress, hair, gloves, and crown of the model would be colored like skin. This color swap would probably be the most likely candidate for the cause of error. Along with that, Nintendo wouldn't put nudity in their Mario games considering they are child-friendly. The source for this rumor can be found here, although it wrongfully claims that the whole thing is fake (it could be possible that the article writer doesn't know about the personalisation A.I).

Theories
The cause for the Skin Peach Corruption are specifically unknown, although it could be tied to game corruptions like cartridge tilting. However, the specification of how this corruption would occur would probably weed out the result of corruption. It can be assumed that the rumors about this corruption have been spread around a whole lot, and it mutated into the nude Peach rumor. The main rumored way of causing the corruption could also be a result of rumors too, due to the specific nature of it. The corruption itself is can occur though, as Personalisation A.I in Super Mario 64 can change the colors of some models to different colors via Enemy Discoloring, which is a similar effect.

A theory on how the corruption had morphed into the nude Peach rumor could be a result of mutation between rumors of Super Mario 64 with rumors of other games. The nude Peach rumor is similar to a Tomb Raider rumor in which it was stated that it was possible for the player to unlock a nude version of Lara Croft. This could be because of how people thought both Peach and Croft to be attractive, which could've molded the nude Lara Croft model rumor into the nude Peach one.

One theorized reason how this anomaly could occur would be due to The Self-Patching Anomaly, as it could be a result from it malfunctioning to cause the colors of the Peach model and textures to change to her skin color. It could be possible that the anomaly had somehow connected how Peach is colored in the game to how much red coins Mario has collected in the game, if the main rumored way to make the corruption occur would be true. How that connection seems to be made is unknown, and seems to be arbitrary.