One would expect these blocks would revert to being a water source when broken, just as other blocks would turn into air, but this is not the case. This can be tested by breaking any waterlogged block.
For a more convoluted demonstration, follow the setup in the order of what is said in chat in the provided screenshots, and then place a block inside the missing block to kill the grass, which should revert to water but does not.
Nathan Adams
In the case of coral plants, breaking one usually leads to the coral beneath dying if there is no other water next to it, which is very strange.
Perhaps if this is intended for waterlogged blocks, it should at least be fixed for the "always in water" blocks – kelp, underwater plants, etc.