Version:

fairylights-7.0.0-1.20.1

Graphical Enhancement Mods:

Oculus
Embeddium (To avoid Optifine Conflicts)

Full Mod List:

TerraBlender
Supplementaries
Soundphysics
Pamhc2trees
Pamhc2foodextended
pamhc2foodcore
pamhc2crops
oculus
naturalist
mysticaloaktree
moonlight
jei-1.20.1
geckolib
fairylights-7.0.0-1.20.1
embeddium-0.3.20
cluttered
cloth
chickensshed
BiomesOPlenty

Server Version:
Mohist 1.20.1, (essentially a Neoforge 1.20.1 server)

On a local world, all aspects of the mod work perfectly. However, when moving to a server (hosted on my machine) with the exact same mod list (with the exception of Oculus as it will not run on a server), every hanging light item and Pennant Bunting item are completely nonfunctional. As soon as any of them are selected from the hot bar, it switches to the default non-colored versions and will not place (Included in screenshot). When attempting to place, the fixture will place for a moment, then disappear immediately. Oddly, the pennants are still completely functional.

I was wondering if anyone else had this problem, and if there was a potential solution.

Prior to putting the item in the hotbar:

After putting the item in the hotbar:

I'm also on 1.20.1 but using optifine, single player it works perfectly fine, but has the same issues when switching to server side.

Can confirm, it's happening for me as well