Whenever sugar cane is placed underwater, the water will not break the sugar cane. It will act much like how a block would, the sugar cane will stop the water, flowing or not flowing. This is repeatable, and has not "failed" once.
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violine1101
Thank you for your report!
We're actually already tracking this issue in MC-929, so I resolved and linked this ticket as a duplicate.
However, that ticket has already been resolved. Depending on the resolution, that can mean that it either will be fixed in the next version, or that it is not considered a bug and won't be fixed.
If you haven't already, you might like to make use of the search feature in the future to see if the issue has already been reported.