Trees seem to appear a couple blocks above water. It looks like they spawned in that way. I have observed this in a fresh 1.17 world, as well as a world converted from 1.16.4 to 1.17.
The attached image shows birch trees, but it is not limited to birch.
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Thank you for your report!
We're tracking this issue in MC-225839, so this ticket is being resolved and linked as a duplicate.
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Thanks Anthony! Was just going to comment this duplicates MC-225839. Appreciate the work you're doing!