All we're saying about this one is that it was probably the work of a disgruntled animator. You won't find it in any version of 'The Little Mermaid' released nowadays, but if you have a vintage VHS copy at home, you'll see it in all its glory.
For reasons of taste and decency, we can't really describe this in any detail, but suffice to say there's something on the castle that resembles a piece of male anatomy, and it shouldn't be there. There's an arrow pointing to it in this picture.