The Bug:

The sounds of splashing when creating mud aren't controlled by the "Blocks" sound slider and are instead controlled by the "Players" sound slider. 

Any action that is created through an entity doing something that results in blocks being changed, is normally controlled by the "Blocks" sound slider. For example, the sounds of villagers opening doors, players applying wax to copper, and sheeps eating grass blocks, are all controlled by the "Blocks" sound slider as they should be, because the blocks have changed in some way as a result of the entities' actions.

Steps to Reproduce:

• Navigate to the "Music & Sounds" settings menu.
• Turn the "Blocks" sound slider to "OFF".
• Turn every other sound slider to "100%".
• Exit this menu, place down some dirt, and obtain a water bottle.
• Create some mud by using the water bottle on the dirt block and listen closely as you do this.
• Take note as to whether or not the sounds of splashing when creating mud can be heard, (are controlled by the "Players" sound slider instead of the "Blocks" sound slider).

Observed Behavior:

The sounds aren't controlled by the "Blocks" sound slider and are instead controlled by the "Players" sound slider.

Expected Behavior:

The sounds of splashing when creating mud would be controlled by the "Blocks" sound slider. The reason why this should be the case is that the blocks are changed in some way as a result of the entities' actions, thus should be controlled by the "Blocks" sound slider.

Code analysis

Code analysis by ampolive can be found in this comment.