The Anti-Piracy Screen is a normally unused screen from Super Mario 64 that was supposed to be used when an individual plays a pirated copy of the game. In the base game, this screen is disabled from appearing in the game, regardless of what type of copy of it is. The screen itself has Mario sitting on the Nintendo 64 logo looking at a Nintendo 64 game cartridge with a distraught expression. The model of Mario is not the one in the game, meaning that this screen was pre-rendered.
The text on the screen in English and Japanese state that it is illegal to pirate any video game according to copyright law, and that the person who's looking at the screen must refer to their Nintendo 64 game instruction booklet regarding more information regarding pirated copies of Nintendo 64 game cartridges.
The first known sighting of the Anti-Piracy Screen came from the YouTube channel known as Super Mario 64 Beta Archive, in which the Youtuber in question finds said screen from an old copy of Super Mario 64 from their friend. It is possible that this cartridge was a pirated cartridge, but it seems to be rather unlikely.
The purpose for creating the Anti-Piracy Screen in Super Mario 64 is highly likely for earlier conceptual designs for the Nintendo 64, back when it went by the names of "Project Reality" and "Ultra 64". Super Mario 64 was developed around a similar time frame as the console itself, meaning that it's very likely that testing, regarding the detection of piracy used early versions of the game.
It is also possible that piracy detection in the earlier versions of the Nintendo 64 had the same mechanics used with both the NES and SNES, with the CIC lockout chip being used for cartridge's and consoles to verify that the copy of the game is not a pirated one. With this possibility, the Anti-Piracy screen in Super Mario 64 was probably needed in order to show detection of pirated copies of the game in said earlier console versions.
As to why it could have been scrapped, the final versions of the Nintendo 64 contains a modified version of the CIC lockout chip that uses a checksum to detect if a cartridge is pirated or not. If the checksum finds the cartridge to be pirated, the game would not turn on. This process could've made the Anti-Piracy Screen for Super Mario 64 to be pointless, so it was scrapped.
How the Anti-Piracy Screen was discovered could be as a result of an error caused by the Personalization A.I enabling the screen to be featured, particularly via The Self-Patching Anomaly. This anomaly could have enabled the piracy screen to be enabled on any potential cartridge of Super Mario 64 as a malfunction.
"So, I was in my house. I was going to play some super mario 64. I booted up the game and the norm happened at first. But when I loaded my save file and went into bob-omb battlefield, this anti-piracy screen showed up. It looked like mario was about to cry on a n64 logo. The bottom of the screen had japanese text that I of course didn't understand. I decided to get a new copy after this occurrence, but I haven't played super mario 64 since."
"I found this screen when I was about to go into the final bowser level. I jumped into the warp and for some reason, a star select screen showed up. All stars were collected and all the stars were named "There is nothing you can do". I selected a random one and this screen showed up. A eyeless, sad mario head with blue japanese text is the appearance of this screen. I haven't been able to play this copy again, since it just blacks out if I try to boot it up."