I was squatting and using water buckets and I accidentally hit a nearby chest with a water bucket in my hand. The water placed itself basically inside and around the chest (on the same block as the chest) and then poured as usual from the source block. From a standing position I could not take the water back, I just opened the chest, from a squatting position I could put the source block back into the bucket.
Comments 2
According to the 1.4 changelog:
A water source block can be placed inside of most non-solid blocks
This is normal and is called water logging.