This is a variation, albeit less common, of a well-known glitch called 'Glitch City' which is when the overworld's tile set(s) are scrambled into a nonsensical and often times un-navigatable hodgepodge.
Basic information: https://glitchcity.info/wiki/Glitch_City
The most well-known is the 'wrong warp' variation in which you invert the Safari Zone so that you're entered into a session when you
leave.
What you've triggered is the 'stepping out of bounds' variation:
An out of bounds Glitch City in Pokémon Red, Blue, Yellow is a type of Glitch City that appears when the y coordinate of a map is a certain value higher than its y boundary. It is not to be confused with a Generation II out of bounds Glitch City.
It can be contrasted with a Phantom City; which is a copy of a map that appears for excessively high x positions greater than the x boundary.
The required y coordinate for an out of bounds Glitch City may vary[clarification needed].
Like Glitch Cities accessed from a wrong warp, they are typically sourced from an existing map but with an invalid map block source pointer.
Accessing an out of bounds Glitch City
Use a free travel walk through walls glitch.
Go to either the north-west most or north-east most corner of a map (where y=00), then walk west or east. Alternatively, the glitch may work when y ranges between 01-06, with 06 placing you at position FE, 05 placing you at position FD, etc. The map you set up the glitch from must have a real east or west connection.
The y coordinate will be corrupted. Keep walking up to see a Glitch City.
https://glitchcity.info/wiki/Valid_source_map_Glitch_City#Through_stepping_out_of_bounds
Information 
Content
News
Dex
Episode Guides
Trading Card Game
Columns
Interactivity 
Caption Contest
Name Rater
Ask Sentret
Cards
Trivia
PokéMole
Community 
Forums
Squads
Tournaments
Fanfics
Site 
Tagging
Mantis
About
Recent Posts