I got this issue several times in single player, while trying to design a nether sprout/root farm. My assumptions are that It's either entirely triggered by rng or by the nylium blocks being moved at unfortunate times and chance.

Expected behaviour:
Nether vegetation grows normally around block it's being dispensed on or if blocks are in movement, nothing happens.

What happens sometimes instead:
Vegetation doesn't appear, server tick freezes, client continues like everything is normal. (So I can still fly around, but can't flick levers, pick items up or quit & save the game. (On quit the dirt background shows up, but nothing happens after that, can't close it with alt+f4 but the window doesn't show up as 'not responding'))

How to reproduce:
Use bone meal on nylium block with upward facing dispenser while the nylium is being moved by a piston. (Not sure if piston movement or dispenser direction matters)