Issue: Mobs spawned in or out of water with both a bucket or a spawn egg can appear invisible when viewed from ABOVE water, but will usually become visible when player is in, under, or at the side of water below the water's top level (viewing through glass). Parts of the mob's model not in water will be visible at any angle (such as a tail clipping through glass blocks).

The issue can occur when the player is viewing a mob at any elevation/angle through water (from the outside of said water), but is most consistently recreated when the player is above the water’s top level.
Creation: In creative mode, first spawned several axolotls with a bucket in an open glass box while under water. Flew above water, and axolotls disappeared from view. Went back under water, axolotls became visible again.

Spawned a single axolotl with a spawn egg, and suddenly invisible axolotls became visible above and below water, but then the egg-spawned axolotl exhibited the same visibility issue. Saved world and reloaded it. Egg-spawned axolotl still occasionally appeared invisible at some angles when viewed from above water. Repeated tests and saves on the same world, issue persisted. Created a brand new super-flat creative world native to 21w13a and issue still exists.

Decided to test all mobs with a spawn egg/bucket in the new 21w13a world to see what other mobs showed issues. Found the following:

(Y =Has visibility bug | N =Appears as intended | *: =Special issue, see note/image)

• Axolotl: (egg) Y (bucket) Y
• Bat: Y
• Bee: Y
• Blaze: Y
• Cat: Y
• Cave Spider: N
• Chicken: Y
• Cod: (egg) Y (bucket) Y
• Cow: Y
• Creeper: Y
• Dolphin: Y
• Donkey: Y
• *Drowned: Doesn’t turn invisible, but instead gets a dark overlay (see image)
• Elder Guardian: Y
• *Enderman: Doesn’t seem to be affected, but teleports too fast to tell
• Endermite: Y
• Evoker: Y
• Fox: Y
• Ghast: Y
• Glow Squid: Y
• Guardian: Y
• *Goats: Invisible and also don’t float? Not sure if sinking is an intended feature.
• Hoglin: Y (issue persists even after zombifying from Overworld exposure) Y
• Horse: Y
• Husk: (issue persists even when converted into zombie from water exposure) Y
• Llama: Y
• Magma Cube: Y
• Mooshroom: N
• Mule: Y
• Ocelot: Y
• Panda: Y
• Parrot: Y
• Phantom: N
• Pig: Y
• *Piglin: Affected by bug, but less reliably so?
• *Piglin Brute: Doesn’t appear to be affected, but due to unreliability of the normal Piglins to produce results, it is possible the bug may also affect them as well, just far less frequently.
• Pillager: N
• Polar Bear: Y
• Pufferfish: (egg) Y (bucket) Y
• Rabbit: Y
• Ravager: Y
• Salmon: (egg) Y (bucket) Y
• *Sheep: are visible, but appeared sheared when fully submerged, despite having a full coat when spawned
• *Shulker: Doesn’t seem to be affected, but teleports too fast to tell
• Silverfish: Y
• Skeleton: N
• Skeleton Horse: Y
• Slime: N
• Spider: N
• Squid: Y
• *Stray: Clothing overlay disappears, appearing like a regular skeleton
• Strider: Y
• *Trader Llama: Carpet overlay disappears, appears as a normal llama
• *Tropical Fish: (egg) N (bucket): Visible, but spawns as only one type of fish (see image)
• Turtle: Y
• Vex: N
• *Villager: Clothing overlay disappears, only base underwear shows
• Vindicator: Y
• Wandering Trader: Y
• Witch: Y
• Wither Skeleton: N
• *Wolf: is both invisible when viewed through water/fully submerged, but when spawned in water, wolf will always appear dark grey. Wolves spawned outside of water are also invisible when viewed through water, but always appear their normal white. Wolves spawned outside of water but then pushed into water will turn dark grey. Wolves spawned in or out of water that are grey will shake and turn to white as intended.
• Zoglin: Y
• Zombie: Y
• Zombie Horse: Y
• Zombie Villager: N
• Zombified Piglin: N

Bug seems to prioritize affecting the most recently spawned mob, with older mobs no longer exhibiting issues, though this is not always the case.