As seen in attached screenshots, red sand has generated and although a cave was carved the red sand remains hanging in mid-air.
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We're tracking this issue in MC-750, so this ticket is being resolved and linked as a duplicate.
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Are you sure this is the typical floating sand on world generation issue though, and not that red sand has been missed from the new cave carvers? I've found numerous cases of this in this snapshot, but only so extreme when it is red sand. Normal yellow sand in the same caves seems to have been removed.

Duplicate of MC-16132