I believe this is actually not a bug. Rather, before the Axolotls and Glow Squids were spawning at higher light levels than they were supposed to. They were both intended to only spawn at light level 0. In 1.17.20, they apparently fixed the “issue” of them spawning at light levels above 0. The ice in the frozen ocean decreases the light level, allowing them to spawn more easily.
As for why you aren’t seeing many in caves, it may just be that there’s not many places for them to spawn.
This also happens if they run into a pointed dripstone. I tried to decorate a tank I made for some with the pointed dripstone and noticed they were just sitting on the bottom with their faces in the stalagmites.
I believe this is actually not a bug. Rather, before the Axolotls and Glow Squids were spawning at higher light levels than they were supposed to. They were both intended to only spawn at light level 0. In 1.17.20, they apparently fixed the “issue” of them spawning at light levels above 0. The ice in the frozen ocean decreases the light level, allowing them to spawn more easily.
As for why you aren’t seeing many in caves, it may just be that there’s not many places for them to spawn.