I have experienced the same issue. Here is a video. https://drive.google.com/file/d/1c6h0qleTyY8r9mycU21G0cSIgHptP54r/view?usp=sharing I don't know if you can see but the chains flicker. I don't know if this is fixable via a change in the command or is really a bug. These commands worked fine on 1.16.5
Yes, I know, but it would still be cool.
This is really odd to be resolved as works as intended. It should probably be fixed by offsetting the fire model.
Can confirm 1.17 rc-1
Could you try doing the same without the data packs? It would clarify the issue. The problem could be because something affected your data packs in between releases. I tried the same command and it worked for me.
I found a workaround! If you set the "time" tag of the falling block to -1, it remains visible. If you are not using a repeating command block to continually set it, you can set it to a larger negative value to keep it visible for longer. It is just weird as I never had to do this before 1.17...
Example command: /summon minecraft:falling_block ~ ~2 ~ {NoGravity: 1,Time: -1,BlockState: { Name: "minecraft:chain"}}