This band is where the PxMid is supposed to be placed. (The PxMid is the looping graphic that extends along the base of a level merely to look pretty; check Unemployed in Greenland in MASCOT for an example.)

The funny colors are caused by MASCOT being given a nonexistent PICT resource value for PxMid in Level Info. To fix this, enter the Level Info and replace the following fields with 0:
(list)
() PxMid
() Layering
(*) INFO(9), INFO(10), INFO(11)