With the new updated rail and minecart mechanics if a rail is placed it is supposed to be waterlogged and the water should continue as if there was nothing there.

The water acted as if there was a full block instead of rails. The water streams went around the rails like a full block, or if the water flows on top of the rails it acts like it is a full block.

1. Place a rail under or next to flowing water.

 Note: None of this happens when you place a rail in a water source block.