Fortune works on tall grass but not on short grass.

Steps To Reproduce
1. Enchant an axe with Fortune III+
2. Mine an amount short grass (70)
3. Mine an identical amount of tall grass, destroying the upper half of the grass. (70)
4. Note that you have a considerably larger amount of seed for tall grass.

This is more noticeable if you mine with a fortune level that is inaccessible via vanilla commands.