Doesn't seem to have been fixed in 22w19a, not even doing knockback. See the video:
[media]Well actually the origin where I placed the village was a flat area but the village ended up bigger and reaching some trees. Also I'm pretty sure I've saw some villages generating next to forests and trees but no such issue.
This is WAI, see the youtube video below (By Slicedlime, one of the developers):
youtu.be/h-VR1ssE7Xo?t=38