This happens throughout the whole world, in several busy cities. A stranger strategically bumps into you and drops his bag - and you both hear something that doesn’t sound good.
As he picks up the bag and looks inside, his porcelain souvenir (or camera, laptop, etc) is broken into pieces and a big scene takes place. You don’t hear the end of it, as he is loudly accusing you of breaking his precious item. He yells and calls for Police.
Being in holidays and not wanting to deal with local authorities, several tourists prefer to give him some cash as compensation, just to get away. Some scammers could collect up to $500/day.
How to avoid: don’t even give him a penny. Counter attack, you be the one calling for the Police. Call his bluff. He will be out of there in no time.