Basically what happends is, sometimes the "reflective" textures will break in Mario 64. (This happends every time you change a setting.)
There is the wrong version:
And, there is the right version:
You can clearly see that the texture is facing the wrong way.
The most obvious issue caused by this, are the bubbles in Bob-omb Battlefield.
There is the right version:
(oops)
The wrong version is just the reflection texture 90 degrees.
It doesn't happen when I set the graphics to HLE.