He was a Kids Next Door operative who was scheduled to be decommissioned after turning 13. While being transported to the Moonbase, he sabotaged Prison Transport Delta, the ship that was transporting him, causing it to fall to Earth and strand the people aboard on a beach near the Delightful Mansion From Down The Lane, which he then headed towards, apparently working for its residents.
Numbuh 86 called in Sector V to help catch the fugitive, and gave Numbuhs 1, 2 and 4 the "assignment" of guarding a dandelion while she, Numbuh 3, and Numbuh 5, stormed the mansion in search of Numbuh 206. The masked figure is eventually captured and brought before Numbuh 274, where it is revealed that "he" is actually Numbuh 362, who had been spying on the Delightful Children when she was mistakenly captured by the decommissioning squad.
Thus, Numbuh 206 (presumably) was never decommissioned, was never mentioned since this incident.