Conduits are waterlogged when placed out of water
The bug
When conduits are placed out of water, they create a water source block. The expected behavior would be the player is unable to place the conduit or the conduit is not waterlogged. This can further be exploited by using conduits to place water in the nether.
It was rather easily fixed in Bedrock Edition by removing the water. However, its not done in Java Edition (I hate this name) yet.