Basically, I was building an auto-chicken farm, when I seemed to run into this issue.
Every time a baby-chicken spawned out of an egg from the dispensers, it landed in the water, and wasn't carried along, like items and other entities, but rather remained still, so it would drown.
On the screenshot you can see a part of the contraption. Signs were holding off the water from the hoppers you see on the screenshot. Baby-chickens would drown where the dispensers are, or at deeper parts, because they aren't carried along like the normal chickens, as you can see.
I'm not sure if this only counts for baby-chickens, or for any baby-animal.