The bug
When a conduit is placed underwater and a sponge is used on it, one would expect the water within the conduit block to be removed and a dry conduit be left behind, or for the conduit to break and drop as an item (how coral behaves in this situation since MC-127111 was fixed). However, neither of these are the case, as instead, the water remains in the conduit block.
Linked issues
relates to
Comments

Can confirm for 1.13
I think it might be an intended feature, making the conduit like a "water protector" or something like that.

Fixed in 18w31a
Can confirm for 1.13-pre4.