PvP Desync Bug or Hacking
Sadly this happens sometimes when you or your opponent have lags. :-(
Can’t be avoided. It’s not hacking.
This is indeed a synchronization bug.
It happens because when a player is downed, the server sends a packet to all the clients, letting them know that the player has reached 0 health and is now downed. If this packet arrives late (due to latency), the character might have had time to move some more before appearing downed, and so, its position can be offset.
The player’s position is normally updated when the player moves, and because players generally do not move when downed, it never gets updated until they are either revived, or defeated completely.
This also prevents other players from reviving, or finishing off the downed player, since the prompt only appears on the screen when close to the client-side position, but doesn’t activate because it does not correspond to the server-side (actual) position.
This is an exploitable issue, often abused by rangers who can very efficiently revive themselves with the use of Lick Wounds.
To fix this bug, ArenaNet needs to include the player’s current position in the health update packet if the health is 0. It might cause the character to teleport a little, but at least it will be properly interactive when downed.