Bedrock ceiling is generating on the topmost layer of the world and sunlight shines through it, which messes up 8 bit height cavern worlds. I believe the current vanilla stance is that the top layer is reserved for fire and must not contain solids. Shouldn't you generate the ceiling at top-1? I'm pretty sure that would prevent the lighting issues.

You can try it out by yourself with ReplacedBlocks.

I'm using custom height control, but that doesn't change the fact that the feature is broken...

Ok, I'll try. But in the vanilla Nether it's also generating on what used to be the last layer before 1.2.

Yes, it's fine to generate on layer 127, just not on 255, I think.