What I expected is it to render a chest model where the falling sand entity is. This did not happen.

What happens:

Entity DOES fall
Shadow DOES render
Entity DOES land creating the correct block
Entity DOES NOT render the chest whilst falling

I am pretty certain this has to do with the fact that it would be rendering a "complex block model", and Mojang either overlooked it, or decided not to implement it.

I know in earlier versions it would render an oak plank block, as that was the default texture assigned.

Maybe this is intended, maybe not, but I do think that chests should show as they fall. I see no reason why they shouldn't.