I placed a water bucket to climb up an Obsidian tower to destroy the crystal but the dragon flew through the pillar and destroyed my water source block in the process. I am not entirely sure if this is a bug but I decided to report it just in case it was a bug.
The ender dragon can destroy all blocks except endstone, obsidian, iron bars and blocks that the player cannot destroy etc. They can also break water and lava, that is intended.