Powder Snow generates naturally in groves and snowy slopes. However, unlike Bedrock, powder snow strips can't ever be exposed to the surface. Regular snow blocks will always replace the top layer.
This prevents players from falling into it, which defeats the purpose of its natural generation.

Notes: While testing this, you may find a different formation of powder snow that actually generates on the surface, but those are just 1 block deep patches that may replace the surface sometimes. I am referring to the patches that are similar to stone strips and would actually make you sink in.