Christmas Rushed: The game in its completed state was too ambitious for it to be released as a whole in such a short time. Additionally, McDonald's ended up pushing Happy Meal toys before the game was released, which further forced Sega's hand. Sonic 3 was released in February 1994, while Sonic & Knuckles was released eight months later.
Copy Protection: Pirate copies of the cartridge obviously do not have the lock-on slot. This means a huge chunk of content will be unavailable, so even though the game is still fully playable, it's a lot less interesting.
Game Mod: Sonic 3 Complete is a mod that polishes the game in areas that the official Sonic 3 & Knuckles neglected (fixing glitches, giving Super Sonic actual sprites for certain level gimmicks) as well as allowing a plethora of options such as choosing individual tracks between Sonic 3 or Sonic & Knuckles and allowing the ability to play Sonic 3 or Sonic & Knuckles standalone in the same game. It also added some goodies like restoring the "Beta" level order (Flying Battery after Carnival Night), and the option to do the Super Peel Out from Sonic CD. For more extras, you can even create IPS patches that change the game even further, such as changing Sonic back to his Sonic 1 and Sonic 2 sprites, with new sprites to accommodate them for all of the actions he could only do in Sonic 3 & Knuckles.
God Never Said That: Takashi Iizuka only said that Super Emeralds were a late addition to Sonic 3 & Knuckles due to wanting a bonus lock-on incentive, which causes certain fans to interpret them as being "non-canon".
Manual Misprint: The two Badniks from Flying Battery Zone in Sonic & Knuckles first showed up in the Sonic 3 instruction manual.
According to Cirocco Jones (mistakenly credited as Scirocco in the Sonic 3 credits), there's a huge legal mess concerning the music used in the games, likely due to unpaid royalties, improperly crediting the musicians, or (as was the case with Dreams Come True), licensing issues. Considering that two of the music composers (Michael Jackson and Brad Buxer) directly sampled songs from their respective discographies, the latter is the most likely. It's generally believed this is the reason why a Taxman/Stealth remaster like the first two Genesis games is unlikely (though Taxman made a proof of concept video in honor of the game's 20th anniversary), as Sega has only been able to release direct emulations of the original game or recoded versions with different music (as seen in the PC version).
The music issues are likely the reason why the incredibly popular Ice Cap Zone hasn't appeared in Generations nor Mania, despite both games being dedicated to re-imagining popular levels from previous games. Its background music was an originally unreleased song called "Hard Times" by The Jetzons, a band that composer Brad Buxer was once a part of. Because of this, Sega likely does not hold the rights to the song, preventing its appearance in said games.
Shrug of God: The Super Emeralds only existed in this game and they simply vanished after the events of the game:note In Sonic Mania, stone relics carved in the likeness of the Super Emeralds appear in their place at the Hidden Palace.
Kazuyuki Hoshino: "They're gone. I don't know how it happened, but they're gone."
There tends to be confusion as to why Sonic 1 could not be locked in with Sonic & Knuckles. The two most popular explanations are that Knuckles would have dramatically altered the color pallete or that Knuckles gliding on conveyor belts in Scrap Brain Zone would cause the game to crash. Both of which were solved by the famous ROM hack Knuckles the Echidna in Sonic the Hedgehog as well as any future ROM hacks starring characters other than Sonic.
Despite what your friends (and basic logic) told you, it's not possible to beat Fire Breath the first time you see it and stop it from burning Angel Island. No matter how fast you hit it, it'll successfully set off the firebombs and escape with its robotic life.
Sega Magazine (UK) claimed in its issue 11 (page 70) that there was a secret character hidden in Sonic & Knuckles: "Rankles, the green otter with outsize sparkly ankles and Knuckles' sidekick." They offered a million pounds to the first person to send them a photo of Rankles. At the end of the paragraph, they outright admitted that they just made him up, but some kids at the time missed the addendum and thought it was all real.
Anyone who sees Rankles should call Alcoholics Anonymous because Tom Guise just made him up. And we're afraid we couldn't give you the million pounds anyway.
As an extra bit of irony, there actually is a glitchy green palette-swap of Knuckles, who looks an awful lot like the magazine's illustration of "Rankles"... But he's in the Sonic 3 cartridge, not in Sonic & Knuckles.
Flying Battery Zone was originally planned to be in the Sonic 3 half, between Carnival Night and IceCap.note Sonic would have improvised the broken door as a snowboard, as demonstrated in Sonic 3 Complete. Time constraints intervened, and it (along with at least "Mushroom Valley" and Sandopolis) had to be cut and moved to the Sonic & Knuckles half. In the end, this was probably a good call, as it helps to balance the emerald collection in the combined game.note However, the snowboarding off a sheet of metal from Flying Battery Zone at the beginning of IceCap did inspire the opening to the Hero side story as well as the first part of the City Escape level in Sonic Adventure 2 a few years later with something similar to the original snowboarding planned transition between Flying Battery and Ice Cap from this game happening in it.
In a case of What Could Not Have Been, the Super Emeralds and their powers were not part of the original plan. According to Takashi Iizuka at Sonic Boom 2013, they were only added after the game was split so the player would have an incentive to go through another set of Special Stages.
A theoretical "Knuckles the Echidna in Sonic the Hedgehog" was going to be accessible by locking the game to Sonic the Hedgehog 1. However, this idea was scrapped, mostly due to palette issues (as all the in-game graphics used Sonic's palette as a base) and bugs involving the gliding mechanic in Scrap Brain Zone (though there have been many ROM hacks since then that fix both of these issues).