This is a glitch in the thirty-third level in Spyro the Dragon - Twilight Harbour, which involves standing on the water at the beginning of the level. The glitchy spot is located on the left side of the first giant metal vault. It seems like Insomniac Games (the developers of the game) unintentionally forgot to make this area harmful during the development of the game. However, only a small part of it is walkable. Going a little too far to the left, right or forward, out of the permitted boundaries, will make Spyro start drowning and not having at least one hit point (green Sparx) means instant death. It is advisable to always have a full health bar when doing this.
Accidentally, this is not the only level in the game where you can stand/walk on a hazardous liquid. In the level Dark Passage, there is a place in which you can walk freely in the purple water without getting hurt. It is located in one of the pools next to the stairs that lead to the fifth and final dragon in the level. The glitch occurs only on the NTSC-U version of the game.