When looking through transparent blocks (such as stained glass), then clouds, transparent entities, and particles in front of water are rendered behind the water instead.
This happens despite using Fabulous! graphics.
To reproduce
Clouds
Build a water pool on the ground
Fly above the clouds
Place a platform of stained glass
Look through the stained glass through the clouds onto the ground
→ ❌ The cloud doesn't render where the transparent blocks on the ground are
Transparent entities
Build a water pool
Throw a slime block item at the edge of the water pool
Alternatively, summon an invisible armor stand and go into spectator mode
Look at that item/entity through stained glass
→ ❌ The item/entity is rendered behind the water
[media]
[media]
Particles
Build a water pool
Place a campfire at the edge of the pool
Throw a lingering potion
Look at the campfire and particles through stained glass
→ ❌ The particles are rendered behind the water
Related issues
discovered while testing
is duplicated by
relates to
Attachments
Comments

In the screenshot, the white dots on the pool are lily pads. The cloud renders properly in front of those.
Still happens in 1.16-pre1, graphics set to "Fabulous".
I did some testing and this affects the player in spectator mode and transparent items as well, and I imagine that all translucent entities are affected
Confirmed in 1.16-pre2.
Affects 1.16 Pre-3.
It affects held transparent items in third person mode as well as the things I listed in my previous comment.
It doesn't seem like it happens with enchanted items anymore though.
[media]
Cannot reproduce with Fabulous!; at least with the provided reproduction steps. Is this still in 1.16-pre5?
particles, held transparent blocks, dropped transparent blocks, the player in spectator mode and clouds are still affected in pre 5
Still able to get the exact same thing as described in the description with 1.16-pre5 and Fabulous. I have a GeForce GTX 1050 Ti, but the issue seems to be independent from the graphics card as far as I can tell.
Affects 1.16 release candidate 1
This affects block outlines as well
Affects 1.16.2
Affects 20w45a
Affects 20w46a
Affects 20w49a
Can confirm in 20w51a.
Affects 21w03a
Can confirm in 21w05b.
Affects 21w06a
Can confirm in 21w07a.
Affects 21w11a
This also affects the block hitbox outline, semi-transparent entities and transparent items. Affected items are stained glass, honey blocks and slime blocks and probably more.
Affects 1.17 Pre-2

Affects 1.17

Can confirm in 1.17.1.
Affects 21w38a
Affects 21w40a
Affects 21w41a
Affects 21w42a
Affects 21w43a
Affects 1.18 Pre-1
Affects 1.18 Pre-3
Affects 1.18 Pre-6

Affects 1.18

Affects 1.18.1

Affects 1.18.2

Affects 1.19
Can confirm in 1.19.2.
Confirmed in 23w14a. I've rewritten this bug report to make it easier to understand. Also, all of these rendering issues are specifically related to the water, so I've adjusted the bug report accordingly to reflect that.
However, not all cases shown in previous screenshots still happen:
Block outlines no longer are affected
[media][media]
Enchanted items are no longer affected
[media][media]
All other cases shown in the currently attached screenshots still occur as-is in 23w14a.

Affects 1.20.1. Note that there are some cases where this bug occurs without Water being present, e.g. particles + stained glass + Nether portal (as described by MC-187614).

Affects 1.20.4