Water in the kelp, sea grass, coral and coral fans can not be removed (either by bucket or sponge). In addition, water in these blocks don't even flow.
I'm not sure if it is a bug. If it's one of the features, that would be so strange.
To achieve the situation of this screenshot, you just need to
1: place water.
2: place these blocks.
3: remove the water beyond those blocks.
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migrated
migrated
The water not flowing portion of this was resolved in MC-125297 however the main issue I believe this bug was meant to address is that sponges do not remove the water from these blocks (and thus destroying them like they do for lily pads). So when clearing out water from an area, we have to first remove all sea grass/kelp/coral from that area otherwise the water sources within these blocks will persist and potentially re-fill the area.
This issue exists in 18w22c.
shufboyardee
The issue with sponges leaving these blocks untouched is MC-127099, still unresolved. Thanks for keeping this up to date!
migrated
Thanks! Missed that one in my search.