If you try to create a display entity with lava or water, it does not render anything. The entity will still be generated but have no graphic. This is true for any variety of water or lava, source, different heights, or falling.  If you summon a waterlogged block, like a slab, the slab will render but the water will not. If a cauldron is spawned with lava, or water it is rendered correctly except for the color map on the water.

 

/summon block_display ~ ~ ~ {block_state:{Name:"minecraft:water"}}

/summon block_display ~ ~ ~ {block_state:{Name:"minecraft:lava",Properties:

{level:"0"}

}}

/summon block_display ~ ~ ~ {block_state:{Name:"minecraft:oak_slab",Properties:

{type:"bottom",waterlogged:"true"}

}}

/summon block_display ~ ~ ~ {block_state:{Name:"minecraft:water_cauldron",Properties:

{level:"3"}

}}