Simply put, if you attack a leash on to a fence and break the fence, the leash coil will still remain intact, floating in the air.
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Added a screenshot. I would say this is a minor visual annoyance.
To reproduce, you need to break the bottom part of the leashed fence, not the top part.
The entity doesn't have enough time to realize that it isn't attached. Confirmed but the description should be changed for "doesn't remove the leash for 3-4 seconds.
I can reproduce this, but the floating leash will drop as a resource in 3 to 4 seconds, perhaps there is code which check for the situation but just not getting triggered in time.