Is it a mod compatibility issue?

Yes

If it's a mod compatibility issue, please provide the link(s) to the incompatible mod(s)

https://www.curseforge.com/minecraft/mc-mods/visual-overhaul

Minecraft version

1.20.4

Describe the issue

Items in furnaces, blast furnaces, and smokers will no longer appear as they should in the mod, while immersive portals is enabled.