This bug is a parity issue. When you place flowing water into the rails, it breaks. This is changed in the latest 1.17 snapshot of Java Edition.
Step to Reproduce
1. Place down some rails
2. Place water bucket, at least only once (to make sure it's flowing)
---> ❌ the rail breaks
Linked issues
is duplicated by 3
Comments 8
And rails can still be waterlogged, but as soon as the water isn't a source block... yeah, the rail breaks.
For me on bedrock for ps4 the rails still break if a water source is above then trying to build a sugarcane farm, also if one is water logged and there are other rails around them they will also break
Affects 1.16.200.57 Beta.