Poison Mushroom

PEACH120.dream is the name given to a specific corrupted version of an earlier model of Princess Peach that would appear in certain copies of Super Mario 64. This corruption can happen in any level or area in the game, and has been noted to be an uncanny annoyance to those who had seen it. This corruption does not seem to harm the game or the console in any way.

Description
PEACH120.dream's model takes form of an earlier version of Princess Peach, with the notable difference of legs being found in the earlier model. Another notable difference would be the lower poly count for the model, particularly in the dress and hair. PEACH120.dream is textureless, with all parts of the model being in a dark grey color. Strangely, this corruption uses the rainbow shading used for Bowser in the final boss battle in Bowser in the Sky, which is separate from textures. No animations for PEACH120.dream have been found or seen when it appears in Super Mario 64, with the only pose that it seems to use would be the default t-pose.

The behavior that PEACH120.dream has when encountered in the game is similar to some of the 1-UP Mushrooms' behavior; in which it would chase Mario all throughout the level its in. Along with the chasing, it doesn't seem to have any collision behaviors placed into it when it comes to geometry in the level. What's different about PEACH120.dream would be that when it comes into contact with Mario, he would lose a life and die. Some reportings of the corrupted model state that Mario would become textureless and colored grey just like it; similar to the Textureless Mario Anomaly.

Speculation
The behavior of PEACH120.dream, being similar to the 1-UP Mushrooms except for the death it would cause to Mario, can be connected to the fan-made "Green Demon" challenge amongst players of Super Mario 64. The challenge has Mario collecting all the Red Coins in an area while a 1-UP Mushroom chasing after them, with the player losing the challenge if the 1-UP Mushroom gets collected. A hack of Super Mario 64 expands this concept further, with the 1-UP mushroom that chases Mario would kill him and it being used for all the courses and stars available.

It is theorized that PEACH120.dream was manifested in part due to the Personalisation A.I taking in information on the players' inputs of Mario avoiding the chasing 1-UP Mushroom, and creating a challenge that was based off that concept. This does not explain the use of the earlier Peach model or the shading, which the cause of it being unknown.

Some theories point to the corrupted model being connected towards the Textureless Mario Anomaly, because both phenomena revolve around characters becoming textureless. Along with this, the glitchy nature of both phenomena is a noticeable connection too. However, the Textureless Mario Anomaly would lead to harder corruptions of Super Mario 64, while PEACH120.dream would be considered an annoyance at worst.

Trivia

 * The creepypasta known as "The Princess Society" features a corrupted, textureless princess character that appears in video games. This could be connected to PEACH120.dream considering that both are corrupted models of princess characters, although the latter only appears in Super Mario 64 and doesn't have red hair.