California Doubling: Most fans will notice that the streets of Raccoon City don't really seem terribly large and the layout is fairly wonky even for a Resident Evil game. It makes a lot more sense when you realize that the city's layout was most likely modeled after the layout of Japanese cities as opposed to American ones, American features notwithstanding.
Jossed: Resident Evil 3 contradicted many plot elements that were present in other media tie-ins such as the S.D. Perry novels and the Biohazard 2 audio dramas that were produced by Flagship (the same company that wrote Resident Evil 2). Particularly, the cause of Raccoon City's destruction was changed from a fire that spread across the entire town to a nuclear missile launched by the U.S. government.
Urban Legend of Zelda: There used to be a persistent fan rumor that Nemesis was secretly one of the series' pre-existing characters who was captured and mutated by Umbrella.note This was mostly due to a mistranslated interview with one of the developers that wrongly implied he was supposed to have been a significant character before. They ultimately ended up using this angle with his character in the movies.
What Could Have Been: Resident Evil 3 was originally supposed to be a gaiden game, developed alongside the N64 version of Resident Evil 0, Code: Veronica on the Sega Dreamcast, and Hideki Kamiya's Biohazard 3 (the cruise ship idea that was recycled into Resident Evil: Dead Aim). The planned Biohazard 3 would have taken too long to develop before the PlayStation 2 launched and sales would have been low because of it, so it was scrapped in favor of making new game on the upcoming console and the gaiden game was promoted to the next mainline series title.