The Bug:
On a Vanilla Server items in a waterflow that group up aren't able to be picked up by a player or a hopper (didn't try with a hopper minecart).

This mechanic fully worked on 1.19.4 and its broken in 1.20.1/1.20.2/1.20.3/1.20.4 (haven't tested in 1.20).

I'm not sure how to replicate it. But it is also possible that is related to the redstone clock dropping the items into the stream. I think this is only happening while the clock is dropping items. But none confirmed...

Video Showcasing the bug:
https://youtu.be/UkvTwBpkWpc

EDIT: We tested with vanilla environments. Also I was using a modded version when I discovered the bug. But I tested myself in a no mods version. And even with someone else in a Vanilla version. It kept happening. For me and for them.