Steps to reproduce:

1. Place candles on a block
2. Remove the block under the candles so that they float in the air
3. Waterlog the candles by using a water bucket on them
4. Remove the source water block, for example with an empty bucket or a sponge

Result:
The candles are broken and they drop as items.

Expected result:
Only the water is removed, and the candles stay in the air.

Code analysis:
Code analysis by Avoma can be found in this comment.