The Bug:

Entity names can be seen whilst inside of powder snow/lava.

Steps to Reproduce:

• Spawn several entities in a large area of powder snow or lava.

/summon zombified_piglin ~ ~ ~ {Invulnerable:1b,CustomNameVisible:1b,CustomName:"\"TestTestTest\""}

→  Notice how you can see the names of the entities.

Information:

This did not happen in 21w08b.