Before I reported this, I did see how high I could build on a normal world to make sure I was remembering correctly, and could only get up to y=255. I thought that was always the case.
Okay. Well either way, it is above the building limit. Breaking one of the highest blocks and trying to replace it is impossible, while it is possible two blocks down. Also, Caver's Delight only goes to 255 (or 254), as shown by cut off trees.
This is happening to me every time I try to save and quit on a LAN session as well. I've only noticed this error this last time, so I'm not sure if it's happened every time, but I got the same error as this report MCL-1905. Here's the error report in the Launcher Log (there's no sign of an error in Game Output) (11:48 is when I launched the game, and 13:58 is when I tried to quit):
Edit: My next time hosting a LAN world it happened again with the same error.