The following steps were updated on 8/15/24. The original steps no longer made the issue evident after the increase in the cave monster cap in 1.17.40, simply because the cap-related math in those steps was no longer accurate. There has never been any change to the actual behavior reported here.

Steps to reproduce (updated 8/15/24)

1. At Y = 300 (to be out of range of any other spawnable spots) create a spawn platform about 20x20 with 2-block high walls around its side, and no ceiling.
2. Get yourself a nametag.
3. Set time to night and turn off daylight cycle.
4. Move far enough away from the platform for mobs to spawn on it.
5. As mobs spawn, kill all non-zombie mobs (including zombie villagers) and nametag all zombies.
6. Once you have 8 zombies, fill the platform inside of the walls with 2-block high water.
7. Make another identical platform a few blocks away, on the same Y-level.
8. Move far enough away from the platform for mobs to spawn on it. After all of the zombies on the first platform convert to drowned, wait about another minute.

Expected results

No monsters spawn on the second platform. The zombies that converted to drowned continue to occupy the surface monster population cap.

Observed resulys

Monsters spawn on the second platform after the zombies convert to drowned. The surface NBT bit does not carry over during mob conversion, so the converted drowned count toward the cave cap.

Note on impact:

Due to this bug, zombies can continually spawn and drown, building up massive numbers of drowned mobs in surface pools. This consequence was reported in MCPE-34032, which was resolved as "Fixed" after the despawn rule changes in 1.16 made the issue with drowned less severe. However, problem with mob build-up still occurs as described in MCPE-125111.