The bug
Applying bone meal to a moss block replaces nearby blocks at the same level as the moss block with moss blocks. I am unsure if this is intentional.
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According to slicedlime in his latest update video, this is intended behavior. Bonemealing moss replaces certain blocks on the same y level and also will grow plants (including azalea bushes).
That's true; this may be intended. However, slicedlime's update videos are not considered an official source in resolving bug reports.
There is literally a block tag in the game that governs which blocks moss converts when using it with bonemeal...
I know this does seem like a really weird and buggy feature. Maybe once the caves come out it would make more sense? But in my opinion to prevent this feature from feeling like a bug there should be moss stone/sand/dirt etc. That of course is a feature request.
A single piece of bonemeal can be used to obtain many moss blocks, which can then be composted to obtain more bonemeal than you started with. This can be fully automated using a stone generator and pistons (to break the moss into item form). @unknown demonstrates this in this YouTube video. This should probably be considered while deciding whether or not this behavior is intended.
Doesn't seem to apply to all blocks - sand and stone are the ones I noticed. Does not seem to do so on grass blocks. When spreading, it spreads a lot, and in an ugly cube shape. Seems unintentional. Is the same in 21w05b.