When loading a new world using the new Floating islands world preset, the villages will spawn randomly in the void. I think the game is trying to spawn them at ground level but is unable to find land so is spawning them at Y=0. I took a screenshot below, It's a big issue if anyone wants to use the world preset as a survival so I hope it gets fixed.
EDIT: This also happens to Pillager Outposts
Thank you for your report!
We're actually already tracking this issue in MC-128659, so I resolved and linked this ticket as a duplicate.
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