When water is 5 blocks away from a drop (4 solid blocks, then air) with a fence (or other "water capable" block) between the water and the air gap, water will only attempt to flow in that direction before spreading out in all directions as it realizes that it can't actually flow across the semi-solid block.

However if it cannot flow in that direction at all (e.g another fence or other "water capable" block) then the water fails to flow at all and just sits there.

https://youtu.be/xq8OThjKHg0