Community bug has been reported as seen below.

"You can replace powder snow with lava or water using a dispenser, but not by hand."

Repro Steps:
1. Create a new World in Creative mode with the "Caves and Cliffs" experimental toggle enabled.

2. Use a Powder Snow Bucket to place some Powder Snow.

3. Use a Water Bucket or Lava Bucket to try to place some water or lava where the Powder Snow is.

Observed Results:
Player cannot replace Powder Snow with water or lava by hand, even though the same can be done with a Dispenser.

Expected Results:
Player can replace Powder Snow with water or lava by using a Water Bucket or Lava Bucket.