Using a bucket on a waterlogged block does not pick up the water server side

Steps to reproduce:

1. Place a waterlogg-able block. Waterlog the block using a water bucket.

2. Use an empty bucket on the waterlogged block. When doing this, do not aim directly at the block itself. Aim at the water like shown in the video.

Expected Result:

The water gets picked up and the empty bucket turns into water bucket.

Actual Result:
The water is only removed client side. Flowing water still flows from the waterlogged block. Empty bucket does not get replaced with water bucket.