At the bottom of the air track, the glider hits and stretches a rubber band, that causes the glider to change direction. When the rubber band is maximally stretched, the glider's kinetic energy is zero, because it is momentarily at rest. Since the glider is at the bottom of the air track, its (gravitational) potential energy is also zero. So the sum of the kinetic energy and gravitational potential energies is zero, yet energy is conserved. Where did the energy go?

That energy is the elastic potential energy of the rubber band. At the bottom position, all the energy is being stored in the stretched rubber band, in the form of elastic potential energy.

Explanation:

When the glider reaches the bottom, its kinetic energy and potential energy become zero due to zero velocity and zero height, respectively. So, the sum of these energies will become zero. This will violate the law of conservation f energy. Hence, there must be a third type of energy that accounts for the conservation of the energy of the system at other configurations.

That energy is the elastic potential energy of the rubber band. At the bottom position, all the energy is being stored in the stretched rubber band, in the form of elastic potential energy.