Summary:
When a player sneaks while standing in water or lava near or under incomplete blocks such as slabs, chains, lanterns (at the level of the top of the player) they get a lava/water fog as if they were under water/lava. If you remove the block, the fog disappears.

Steps to reproduce:

1. Place water/lava (flowing water/lava will also work).
2. Stand in water/lava.
3. Start sneaking.
4. Place an incomplete block near/above you (such as slabs, chains, lanterns).
5. Keep sneaking.

Observed results:
Near incomplete blocks, the player gets fog while sneaking if he is standing in water / lava.

Expected results:
The water/lava fog should only appear when the player dives under water/lava.

Video:
water fog when sneaking.mp4

Screenshots: