While picking up items or experience, hitboxes (of blocks, entities, and the bounding boxes of structures) are rendered offset and not in the correct location.
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Hi there!
Can confirm. Was about to post this. Also affects picking up experience orbs.
While this occurs, the block that the player is looking at no longer becomes outlined, as if the weird block outline is moved from the block being viewed to the air.

Only happens in fast/fancy, fabulous is unaffected by this. Also I noticed that on fast/fancy, hitboxes are fully opaque now.

Also affects the Jigsaw Block's outline (48x48 area) on fast/fancy

The outline of the block simply gets moved and rotated. As you can see in my video, the outline keeps the shape of the block you are looking.
This relates to MC-194218.

Ah, this is what my report was duplicated as, I didn't realize it was already reported multiple times, but I can confirm it does happen

Can confirm