New, 1.16 nether trees when grown are not restricted in height by blocks above the "sapling" (fungus). They grow to the normal height that they might otherwise do without the obstructing block, only the block remains in its place.
This does not, however, happen with the overworld trees or the overworld giant mushrooms.
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Thank you for your report!
However, we are already tracking this issue, and this report is a Duplicate of MC-170858, which has been marked as Works as Intended - this is an intentional game feature. If you have a different opinion, please visit the Feedback website.
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Found these MC-191003
MC-170858
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