This area of Gruntilda's Castle was transformed into a sewer by the witch herself.
Clanker, the metal whale, acts as a submerged garbage disposal at the bottom of the areas large pool until freed by Banjo and Kazooie.
The large pool is presumably empty later as Clanker moves on from the Cavern to Clanker's River in Banjo Pilot and then to Banjoland in Banjo Kazooie: Nuts & Bolts.
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