Note: It only happens when the rails are running east-west. Also, for clarification, it only happens when rails are in their powered state.
As far as I can tell, this issue occurs with practically any block on top (glass was the only exception I found), and either lava or water on the bottom.
Only happens when you break the bottom block of the double tall grass. Also, when the bottom block is broken, the top block of a peony appears for a split second where the top block of the grass was.