I was messing around in the snapshots and found water that was floating in the middle of ravines. I wasn't sure if this was just in the snapshots and loaded up 1.16.5 and found a similar problem. The difference being that the water flows down in 1.16.5 in the caves. While the 1.17 snapshots did not have flowing water, just floating water source blocks. I should mention that I was not using the caves and cliffs datapack.

Edit: The seed is 7682056933221869668 (425x, 32y, 21z)