Water and other semi-transparent blocks do not render behind semi-transparent block display when graphics are set to Fast or Fancy

The bug

Water and other semi-transparent blocks do not render behind semi-transparent block display when graphics are set to Fast or Fancy.

To reproduce

1. Place water.
2. Execute the following command (this also works for ice and slime blocks):

   /summon minecraft:block_display ~ ~ ~ {block_state:{Name:"minecraft:honey_block"}}
   

3. Notice how water is not rendered behind the block display.