Peony flowers without the bottom block appear anywhere where grass could appear in initial world spawn.
The peony itself does not exist; only the top half of the block is visible and has a bounding box, and when broken, no item drop occurs, whether with an empty hand or shears, or a silk touch tool, and the breaking particles are not those of a peony.
Furthermore, the "bottomless peonies" appear completely randomly, where no blocks seemed to be in 1.8, implying a sort of buggy retrogen.
This occurs for any clients connecting using 1.8.1-pre1, whether connecting to a 1.8 or 1.8.1-pre1 server (Other players connecting to my server have reported the same visual bugs).