Biomes were given y axis support in recent updates, as preparation for 1.16 and beyond. Currently, examples of y level biomes are near non-existent and for almost all cases, biomes still take up the entire chunk. The few cases we've discovered are only a few clusters of blocks, rather than the bounding boxes of biomes.
Examples, using the seed -9081470300596806506, tested in spectator mode.
- x3, z1337 - flying up and down between y80 and y120 will display several examples of these biome changes, despite little to no variance in the blocks present.
- x13, z1396 - Some of the most notable overlap, biome labels and fog colours change every few blocks between y0 and y200, with the effect most notable between y30-60 and above the nether ceiling.
In the above examples it's also possible to fly above the nether ceiling toward y200 and observe these biome changes, despite no blocks from those biomes being present.
A fix for this is not only important for the Nether update but Cool, Awesome, Very Exciting updates in the future. Tested on both multiplayer and singleplayer, with multiple clients.