not occuring in 1.17.1
i tested it in 1.18.1 pre release and it is appening.
its not totaly a bug since its based on a model.json fonction in minecraft like a ressource pack. they are displaying what they want. obiviously for the fungi mushroom its kinda weird to see those weird pixel falling down but for the crimson roots seem to be correct.
look foward for more explaination since all model are different from inventory from block and from droped item.
world generation has change in 1.6 it has change also in 1.13 it has change in 1.18 too man... its not an issue its intended too... take a world in 1.17 visit it a bit. update it in 1.18 you ill see some chunk will generate using 1.18 generation and it will give you like huge clift of chunk out of the world. this is normal behavior caused by world generation change. if you realy want your old generation back you will need to use a generator for your modified server. plugins are mods. they change the gameplay and the behavior of the server. understand mojang cant manage other dev team. they dev a game not mods for this game.