The bug
When conduits are placed out of water, they create a water source block. The expected behavior would be the player is unable to place the conduit or the conduit is not waterlogged. This can further be exploited by using conduits to place water in the nether.
It was rather easily fixed in Bedrock Edition by removing the water. However, its not done in Java Edition (I hate this name) yet.
Related issues
is duplicated by
Comments


I reported the both other issues on other tickets.

Fixed in Bedrock Edition.

Finally fixed!

this wasn't fixed in 18w20b. I tried /setblock ~ ~ ~ conduit and it still had water.
Yep, still an issue, reproducible in survival by using a sponge.
↑ that would be a different issue. You don't place the conduit that way. And that's how force-waterlogged blocks work.
This issue has been technically fixed by not allowing conduits to be placed anymore outside of water, unless you're using cheats. You can do anything with cheats.

That's not really a fix tho
Also note: It doesn't even have a Waterlogged Tag, but destroying it will update it so the water flows. Also the Hitbox is like a Full Block's Hitbox