A bounding box is the rectangle that surrounds the physical core of an object. The physical core of the object has a diamond shape, fitting precisely inside the bounding box. The physical core is used by the engine to get a sense of the size of the agent and is created when the agent is first injected into the world, using the first image in the c16 sprite file.
If an agent uses sprites that have different sizes, changing the pose of this agent (e.g. carrots going from upright to laying down) also results into recalculation of the physical core. If the recalculated physical core is in an invalid spot, this throws a "bounding box error". This can be resolved by making sure all the sprites have the same dimensions.