Essentially, when placing a Lava Bucket into a furnace (as fuel) when smelting wet sponge, after one sponge is smelted, the furnace will return you a water bucket, instead of an empty bucket. This might be a secret feature, though.
Comments 5
Okay, so this might not be a bug. I thought it was kinda weird though. Maybe that's what Nathan meant when he said "unusual" in the post.
This is not a bug: it is an intended feature.