Buttons act as slabs and although they can be placed in a water source block they block flowing water which shouldn't be how they work since levers, repeaters, and comparators all allow water to follow over them and buttons should work the same way. It will also be much more useful for redstone.

Steps to Reproduce:

1. Place a water source block and let it flow
2. Place a button in the flowing water

Observed Results:
The button blocks the flowing water.

Expected Results:
The water flows through the button.