Water in the kelp, sea grass, coral and coral fans can not be removed (either by bucket or sponge). In addition, water in these blocks don't even flow.

I'm not sure if it is a bug. If it's one of the features, that would be so strange.

To achieve the situation of this screenshot, you just need to
1: place water.
2: place these blocks.
3: remove the water beyond those blocks.