Well, it's not really a bug but it's a game file full of bugs: https://www.romulation.org/PSX/Spyro_the_Dragon_3_-_Year_of_the_Dragon_%5BU%5D%5BNTSC-U%5D_%5BSCUS-94467%5D.rar.html/ Not the original game file but a cracked one, so full of bugs it's virtually unplayable. Can only cause gamers sorrow. It should be removed and, hopefully replaced by the original file.
Will need some sort of reference as to how you know that, the original game had anti-modchip protection so it might just be messing with your playstation or emulator.
When I was younger and had Spyro 3 on my PS1, it was copied, there were tons of bugs. Like for example the eggs you collect would randomly disappear. Things like that. Now that I think about it, I am sure that is what he is referring to. I think it might be some protection, who knows, but I can confirm that I have experienced this as well.
Don't mean to raise the deads, err... But i just want to confirm that all these "bugs" are indeed piracy protection. I also remember that there was several hacks that were supposed to get rid of these protections but none of them ever worked. Maybe there were newer working versions for the antipiracy hack, don't know. You'll have to google it :-\