Since I was making my city, I made a roundabout for shops or anything. This roundabout was under constructing, but this weird glitch occurs.
Does anyone know why it could happen?
Buildings when built in newer Simcity games (4 and 5) will automatically adjust the height of the terrain. The terrain uses a 2D heightmap with values for each corner of a tiled set of squares representing the terrain.
Certain buildings (like most power plants in SC4) require the ground to be level. Thus the game will automatically level terrain when building them and create artificial 90 degree slopes to prevent this from causing problems with roads (roads require that the left and right side are on a level plane, and have a limit to their steepness, which varies by type. Rail is less tolerant than Highway, which is less tolerant than minor roads, for example).
Usually, the game will pick a terrain height which is about the average of the height found on the building's footprint.
It appears you have managed to construct a situation where the algorithm for automatically adjusting terrain height to make the buildings 'look better' failed to do so properly and returned the value '0' instead, causing a very deep sinkhole to happen.
It may have to do with the building being adjacent to a concave piece of road while on a downwards slope, or it may have to do with the exact coordinates of the building and/or its surrounding buildings and roads. You may have to do more experimentation to see how to reproduce the bug.