If an axolotl is leashed and you pick the axolotl up with a bucket of water, the lead will dissapear and only the lead knot will remain there, where you placed the lead. If you click on that lead knot, it will dissapear and no lead will drop.

Reproduce:
Summon an axolotl.
Grab a bucket of water and a lead.
Use a lead to leash that axolotl to a fence.
Pick that axolotl up with a bucket of water.

No lead will drop and only the lead knot at the fence will remain.