Pressure / The Smoking Peanut - S2-E12
Continuity mistake: In the episode "The Smoking Peanut" At the end when the man holds up the pearl out of Mr. Krabs pocket, despite being surrounded by a stadium, the close-up of his hand shows complete blue sky in the background.
Pre-Hibernation Week / Life of Crime - S2-E13
Continuity mistake: When Spongebob falls off the sea needle, he lands on a . It shows his ripped off skin, then it shows his back with the piece missing, but the shapes are different.
Sandy, SpongeBob and the Worm / Squid on Strike - S2-E18
Continuity mistake: When Spongebob shows Sandy the paper clip and a piece of string the string is very small. Yet later after Sandy says, "no silly, how about s for saving our skins", the string is a lot longer.
Factual error: In "Wormy," when Wormy's face is viewed as a close-up in butterfly form, the wrong insect is shown. As Wormy is a butterfly, there should have been circular black eyes, long antennae and a proboscis (tongue). Instead, enormous, rainbow-colored, shimmering eyes, sharp mouthparts and horn-like antennae are seen, distinctive to that of a horsefly. Furthermore, butterflies do not make buzzing sounds, which, again, is a characteristic of flies.
Grandma's Kisses / Squidville - S2-E9
Deliberate mistake: Spongebob and Patrick sucks the windows off Squidward's house using leafblowers. The holes in the wall that the windows were in magically disappear.
Pre-Hibernation Week / Life of Crime - S2-E13
Continuity mistake: Sandy's bikini bottom is gone as she's bending over to paint the fence.
The Secret Box / Band Geeks - S2-E14
Continuity mistake: In Band Geeks during the Day Two scene, in the beginning you can see Pearl near the front, but in the distant shot that follows Pearl has moved further back. (00:04:20)
Your Shoe's Untied / Squid's Day Off - S2-E2
Continuity mistake: Near the start, at first you can see words on the menu board, then you can't. (00:05:50)
Big Pink Loser / Bubble Buddy - S2-E3
Continuity mistake: The broom that Patrick throws on the ground in Big Pink Loser disappears soon after.
Jellyfish Hunters / The Fry Cook Games - S2-E16
Other mistake: When Patrick takes off Spongebob's right shoe to lick, his foot appears to be his left, not his right.
The Bully / Just One Bite - S2-E17
Continuity mistake: Just One Bite: After Squidward buries the Krabby Patty and tells SpongeBob that he hates it, when SpongeBob walks to the back door of the restaurant there's a window to the right of the door, but when Squidward makes plans to sneak a Krabby Patty that window has vanished.
The Bully / Just One Bite - S2-E17
Continuity mistake: The Bully: When Mrs. Puff enters the classroom and apologizes for being late, the door knob is at the left side of the door, but in following shots it's at the right side of the door.
Something Smells / Bossy Boots - S2-E1
Continuity mistake: Something Smells: When SpongeBob walks into the kitchen the freezer door handle is on the right side, but when he opens the freezer door its handle is at the left side.
Dying For Pie / Imitation Krabs - S2-E6
Continuity mistake: Mr Krabs has no eyelashes when he tells Squidward not to tell Spongebob about the bomb he ate. (00:05:01)
Grandma's Kisses / Squidville - S2-E9
Continuity mistake: When Spongebob and Patrick first arrive at the crowd, there's a window on the wall next to them. After they mistake that one octopus for Squidward, the window has vanished.
The Secret Box / Band Geeks - S2-E14
Continuity mistake: In Band Geeks on day four the lever besides the big gate changes positions between pointing upwards and downwards several times.
The Secret Box / Band Geeks - S2-E14
Revealing mistake: When Squidward asks who has played instruments before and Plankton responds, look at Plankton's triangle. The bottom disappears for a split-second.
Procrastination / I'm With Stupid - S2-E19
Continuity mistake: In 'Procrastination' when SpongeBob takes the stack of paper out of the drawer, the paper is the only thing in the drawer. In the next shot, SpongeBob pulls a pencil out of the drawer.
Grandma's Kisses / Squidville - S2-E9
Other mistake: At the end of Grandma's Kisses, Harold "Bill" is olive green.
Dying For Pie / Imitation Krabs - S2-E6
Continuity mistake: In "Dying For Pie", Mr. Krabs takes a piece of the pie, leaving a bit of the pie missing. Later that day, Spongebob pulls the same pie out of his pocket, but the pie is fully together with no pieces removed.
Answer: I believe this is the Season 6 episode "Spongicus".