How to recreate:
1. Dig a one block hole in the ground
2. Use a lava bucket to put lava in the hole
3. Use a water bucket on the lava, the lava just disappears and is replaced with water
I wanted to see if i put a water and lava bucket in separate dispensers, use the lava dispenser, then the water one if it would either create obsidian or pick up the lava. But instead it removed the lava source and replaced it with water.