System Information

• Minecraft Version: 1.17.1
• Canvas Version: 1.0.2201
• Operating System: Windows 10
• Graphics Card: GTX 1050 Ti

Other mods and versions installed

How you triggered the behavior

• Grab some items and put into hotbar
• Go inside water/lava/powder snow

What you expected would happen

• Items in hotbar should render properly

What actually happened

• Items rendering affected by block fog

Logs and screenshots

Fixed by vram-guild/frex@d797ef0

This does not appear to be completely fixed, certain items (such as beds, shields) with a 3d item icon still suffer from this issue. Here is an image of a shield underwater, with other blocks for reference

Typical shield being custom rendered item. Chest and trident might be affected as well.

I don't think they should be affected, chest is an isometric rendering (like the other blocks), and trident is a 2d item texture

I'm not sure what you're trying to argue. It's a bug.

This does not appear to be completely fixed, certain items (such as beds, shields) with a 3d item icon still suffer from this issue.
Here is an image of a shield underwater, with other blocks for reference