Other mistake: After completing a few tasks at Lon Lon Ranch, Link is rewarded with a dairy cow of his own. But somehow, the cow magically just appears back in his house back at Kokiri Village. His house is basically a tree house way in the air accessible just by a ladder. And the doorway is only big enough really for a small child to enter. Yet somehow a full sized cow is now in the middle of his house. And survives without any grass or water inside.
Other mistake: The guy you give the Rabbit Hood mask to will later challenge you to a race, him on foot and you on your horse. Once he leaves the starting area after the race starts, you never see him again during the race until you get to the bridge. Win or lose, you only see him at the bridge. If you won the race, you should have seen him as you passed him.
Chosen answer: There is another thing it does for the player. Deep in the Lost Woods is an area with two creatures that will sell the player items. Look for where you see a bunch of butterflies gathered. Head toward them and you will fall into a hole. When you land put on the Mask of Truth and slowly walk forward. Some Deku creatures will pop out and look at you. After this talk to the big Deku creature to the right and he will increase your ability to hold more Deku nuts. Wearing other masks from the Happy Mask shop will also have different reactions from the Deku Scrubs.