This only affects vanilla water and stagnant water. I placed a marigold in the center of a 3x3 pool of each liquid. Placing it in vanilla water completely overrides all the source blocks with spreading swamp water. Placing it in stagnant water only replaces the middle block as it behaves like lava, being a finite liquid.
Suggested fix: don't allow Marsh Marigolds to be place in any liquid but swamp water.

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