Waterlogged blocks turn into air when broken, rather than water

One would expect these blocks would revert to being a water source when broken, just as other blocks would turn into air, but this is not the case. This can be tested by breaking any waterlogged block.

For a more convoluted demonstration, follow the setup in the order of what is said in chat in the provided screenshots, and then place a block inside the missing block to kill the grass, which should revert to water but does not.