The "Giant Terracotta Warrior" was a giant robot made by Phineas and Ferb in order to fight Doofus Khan's dragon and stop him from destroying the city.
It collapsed with the dragon when the latter's key was taken off, causing it to deactivate and fall to the ground. What remained was a bunch of rubble, which is what Linda saw, while Candace didn't notice.
Physical Appearance[]
In terms of appearance, it looks the same as it did when it was a statue. On the eyes are red spheres that the kids use to see outside.