In the 3x3 area around the flower, if I have a block where a cell would generate, the block gets destroyed.

That's exactly what it's supposed to do :V

It's supposed to delete redstone? And probably bedrock?

So the cells overwrite other blocks? That doesn't sound good.

I can't reproduce this.

I can still reproduce it in the latest version (225). If you turn on the lever in the setup the bedrock will disappear.