Taken from the official Scarlet/Violet website:

This phenomenon is found only in the Paldea region and makes Pokémon shine and glimmer like gems.
When a Pokémon Terastallizes, a Tera Jewel appears above the Pokémon’s head like a crown, and the Pokémon’s body glistens like a cut gemstone.
It’s said that the Terastal energy that seeps from the ground of the Paldea region is involved in the phenomenon.