This is a minor event in the game that activates randomly.
Every time you start a flow session a value is set between 0 and 100 randomly. This value has to be over 70 for the Kaibutsu to appear. This gives you a 30% chance for this to happen every time you try.
How to Trigger This Event
There's a passive Kaibutsu in Moss of green and red walking in front of an entrance blocked with vines (the one which only clears up after you kill the flower girl hiding in the middle of a vegetation patch). You have to attack this specific passive Kaibutsu. Attacking any other passive Kaibutsu will not trigger the event.
After making your way to the Famicom world and to the well you will find a psycho Kaibutsu standing motionless in the well if the event itself is active. Touch it and you become trapped on an isolated stretch of the sewers walkway.