I am able to place Sugar Cane underwater.

What I thought was going to happen...
Nothing

What really happened...
The sugar cane place placed itself underwater.

STEPS TO RECREATE:
1} Find an area suitable for normally growing Sugar Cane (Water)
2}Place Sugar cane on a block of soil or sand that is submerged in water.

I imagine this can be exploited to create MASSIVE Sugar Cane farms.