We don't know what that is, or why it's there. But, we all know in gen 1, there were Pokemon sprites that were weird, disturbing (I really find the Golbat sprite from gen 1 disturbing), or even really different from US/UM's sprites. That's because they were on a gameboy. The gameboy's sprites weren't the best since it was released in 1989. And, on top of that they were the first Pokemon games, so it would contain a lot of flaws. No Pokemon game is perfect, however the developers learned from their mistakes.
Seriously, it is disturbing