I'm referring to the scene when they engage in martial arts fight (after the sword scene). Beatrix hits Pai Mei at the neck, then he smiles and it seems he throws something to her. Anyway, something from his mouth is coming out. This always bugged me off, seeing the movie again triggered this question.
It looks to me like a piece of white lotus, which might be allusion to "Fist of the White Lotus", 1980 movie in which Pai Mei first gets his invincible status. More details about that movie here. I can't be certain, it is not mentioned anywhere.