Other mistake: When you have all 120 stars and see Yoshi on top of the castle Yoshi will start saying: Mario it that really you?"It" should be "is." This was not fixed in Super Mario 3D All-Stars version.
Other mistake: In this game, normal damage to Mario is healed by collecting coins. When Mario is under water and starts drowning, this damage can be healed simply by rising to the surface. This fully heals all damage. But if you are hurt another way, just jumping in the water will heal all damage as if it was from drowning. This is also present in the DS version.
Chosen answer: It doesn't lead anywhere - it is an exit from a bonus star level if you end up dying.