The bug

Nether portals always spawn on the highest possible block but this can cause incomplete nether portals. When there is water below and a layer of blocks at y=254, an incomplete portal (as seen in this screenshot.) will generate at y=254 when there is plenty of room to spawn a complete portal below the layer. When the layer is removed, it does spawn a complete portal.

How to reproduce

1. Use this preset

   100*minecraft:water,154*minecraft:air,minecraft:grass_block;minecraft:ocean
   

2. Go to the nether (/execute in minecraft:the_nether run teleport @s 0 100 0)
3. Set a nether portal (/setblock ~ ~ ~ minecraft:nether_portal) and go through it
   → Incomplete portal is generated despite having room below to spawn in the air