Client thinks that you (or an EnderCrystal) can place fire in middleair. Server tells to client that fire should be on a block or on a flammable wall and destroys this fire block. But the screen is able to render fire block and light from it. Summary, you get light flashing and stacks of lags. For example, write "/summon EnderCrystal" in middleair and you will get this annoying effect.
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Duplicate of MC-4923
Yup. Attempted to reproduce and succeeded.