It's probably just something from another level that ended up on the pallet. It could also have been an extra object that was taken out or just a common glitch.
In Sonic 3, I was playing with the debug mode on the first level, act one; and I came across this weird object that looked like a red sphere. I "copied" that red sphere and it made a bunch of red sphears appeare on the screen. What are these, and what do they do? PS I sent sega a photo of this once...they never replied to me.