Cant place block on certain areas on map

Bug in the youtube vid

https://www.youtube.com/watch?v=JIkcfF9OUPU

Client cannot place blocks in certain areas. Host still can
Places and disappears right away (with low enough ping)
*On LAN, the torches disappear immediately
*The video is recorded with a high latency connection to the server
Minecraft 1.8.1

Tried:
Restarting everything