The bug

Some surface biomes can still appear 3D due to biome smoothing also being applied on the Y axis, causing them to vertically intersect. Even if this was previously intended, this should no longer be the case as described below.

Expected result

Only cave biomes should be 3D, as per the 21w40a changelogs:
Non-cave biomes no longer change with height - so no more savannas in the sky and things like that

Side effects

1. Grass, dirt, sand, sandstone, stone, and ores generate in the middle of hoodoos, as blocks of other hot biomes replace them. Partially fixed with the fix of MC-241539, but still happens.
2. Sand and sandstone generate in improper places, as beaches and snowy beaches intersect other biomes.
3. Foliage such as grass and certain leaves change color on mid-air.
4. Water color randomly changes with height (MC-237312), due to surface biomes with different temperatures being sandwiched in between cave biomes. Resolved as "Works As Intended".
5. This could also be a nuisance for certain mob farms, as you'd have to constantly check the F3 screen if the biome is the correct one vertically.
6. Other biomes overlapping mushroom biomes cause mobs to spawn in them, making this bug an aggravating factor of MC-93271.

Visual analysis

Analysis of an intersection between desert, savanna and eroded badlands biomes. I placed a terracotta block where the biome was eroded badlands, dirt where it was a savanna and sandstone where it was a desert. The original screenshot is also attached.

To reproduce

Seed: 7394312107885230768
Coordinates: /execute in minecraft:overworld run tp @s -2423.43 82.00 6396.92 -145.66 57.90