What did I do wrong?

I think this is what you want!

debounce= false -- Variable to say if it's running or not

script.Parent.Touched:connect(function()
    if debounce == false then - Check if already running
        debounce = true -- Tell the script is being run
        for i=0,1,0.1 do -- Start fading away
            script.Parent.Transparency = i -- Transparency up by 0.1
            wait(0.25)
        end
        script.Parent.CanCollide = false -- They'll fall through now >:)
        wait(1) -- Wait 1 second...
        for i=1,0,-0.1 do -- Start fading back
            script.Parent.Transparency = i -- Transparency down by 0.1
            wait(0.25)
        end
        script.Parent.CanCollide = true -- They wont fall through now :(
        debounce = false -- Tell the script it's finished
    end
end)

First thing first, your main problem.

You forgot an end at then very end of your script. But you should put the new end in line 20.

But that would crash studio, for it runs too fast.

replace while true do with while wait() do .

even though the while wait is not needed.

And you may want to reorder the script a bit, but I did it for you.

debounce=false

script.Parent.Touched:connect(function(hit)

if not debounce then
debounce=true
for i=1,5 do
        script.Parent.Transparency=script.Parent.Transparency+0.2
wait(.1)
end




    script.Parent.CanCollide = false
    wait(3)
    script.Parent.CanCollide = true

for i=1,5 do
        script.Parent.Transparency=script.Parent.Transparency-0.2
wait(.1)
end
wait(1)
debounce=false
end
end)

hope I helped!

Chemz