The bug

When "shade" is set to "false" in a block, the element in question will have the shading commonly associated with most blocks disabled, as expected. However, this only appears to affect the models when used for a block; in contexts where the model is used as part of an entity, the shading will still be present, despite it being explicitly disabled, resulting in strange-looking models.

This effect can be seen in the following situations:

• Mushrooms on top of mooshrooms (previously reported under MC-68302, which has since been resolved as WaI; since that ticket focused more on fixable issues with models I'm re-reporting it under this ticket since this situation is different)
• Blocks being held by endermen, with flowers/mushrooms revealing this effect in Survival
• Poppies held by iron golems
• Blocks displayed in a minecart with a defined custom displayed block, as well as "proper" minecarts with blocks
• Lit TNT entities

Items are also subject to this problem, and have a dedicated ticket: MC-248766

As are item frames: MC-248963

How to reproduce (vanilla resources)

1. Place some red mushrooms atop mycelium, and spawn some mooshrooms nearby such that the mushrooms can be compared
2. Place a block of netherrack, and place fire on top of it via flint and steel/fire charge/some other method if you must
3. Summon an enderman holding a block of fire:

   /summon minecraft:enderman ~ ~ ~ {carriedBlockState:{Name:"minecraft:fire"},NoAI:1}

4. Summon a minecart containing fire:

   /summon minecraft:minecart ~ ~ ~ {CustomDisplayTile:1b,DisplayState:{Name:"minecraft:fire"},DisplayOffset:16}

5. Summon a falling sand entity of fire:

   /summon falling_block ~ ~ ~ {BlockState:{Name:"minecraft:fire"},Time:-2147483648,NoGravity:1}

Expected results (vanilla resources)

The mushrooms on the mooshroom would appear bright much like those present on the mycelium, and the fire held by the enderman and inside the minecart, as well as the falling sand entity, would also appear fully bright like the fire placed atop the netherrack block.

Actual results (vanilla resources)

The mushrooms on the mooshroom appear darker than the placed mushroom (one plane appears darker than the other), and the fire held by the enderman and in the minecart appears noticeably darker than the placed fire. Only the falling sand entity appears shaded correctly like the block is.

How to reproduce (custom resource pack)

Attached will be a resource pack (still in progress) which replaces the TNT and brown mushroom models with the same model used for testing MC-248766. This should make this issue far clearer.

1. Place some red mushrooms atop mycelium, and spawn some mooshrooms nearby such that the mushrooms can be compared
2. Place a block of TNT somewhere nearby
3. Place a minecart with TNT close to it to allow for comparison
4. Summon a normal minecart with TNT as its displayed custom block:

   /summon minecraft:minecart ~ ~ ~ {CustomDisplayTile:1b,DisplayState:{Name:"minecraft:tnt"},DisplayOffset:16}

5. Summon an enderman holding TNT:

   /summon minecraft:enderman ~ ~ ~ {carriedBlockState:{Name:"minecraft:tnt"},NoAI:1}

6. Summon a primed TNT entity with a long fuse:

   /summon tnt ~ ~ ~ {Fuse:32767}

7. Summon a falling sand entity of TNT:

   /summon falling_block ~ ~ ~ {BlockState:{Name:"minecraft:tnt"},Time:-2147483648,NoGravity:1}

Expected results (custom resource pack)

The placed mushrooms, mooshroom mushrooms, placed TNT, enderman-held TNT, TNT in both minecarts, falling TNT and lit TNT would all appear as pure white cubes.

Actual results

Only the placed mushroom and falling TNT entity render as pure white cubes. Placed TNT correctly appears as a solid color, but is darker; report upcoming. The rest of the things have multiple different shades of gray due to shading being applied despite it being explicitly disabled in the model.

Further notes

While not currently listed in this ticket, piston-moved blocks correctly have shading disabled accordingly as well.