The Nightmare Chunk traps Pi'llo's inside, and they cannot be freed until Mario breaks it.
History
Before Antasma was banished into the Dream World by the Pi'illo's, Antasma shattered the Dark Stone, and broken pieces became Nightmare Chunks, and if fallen onto a Pi'illo, where it would trap them inside. The Pi'illo's would be trapped for many years until discovered by Mario.
Gallery
Mario and Luigi encountering a Nightmare Chunk