That excerpt was taken from the Equinox manual. Indeed, I believe I know what they mean by this.

In Room #02-04 of Tori, there is a single Knight walking around near the top of the mushroom platforms that you must kill for a Token. It's a White Knight in the American/European versions and a Green Knight in the Japanese version. Regardless, this same glitch exists in both versions.

By hiding Glendaal down behind the middle tier of mushrooms, we can make this Knight glitch and disappear as he circles the top pedestal.

As he turns the corner, all that you can see is his foot.

By using an emulator to peel away the backgrounds, we can see the reason why this happens.

   

As the knight walks around behind the pedestal, background tiles that are identical in shape to the mushroom pedestal light up to hide him from view. This is how the "3D" illusion of this game's world is created.

   

When we drop Glendaal down behind the middle tier, those background tiles light up to hide him from view.

   

What ends up happening is that the knight gets hidden behind both sets of tiles, causing part (or all) of him to disappear.