This problem happens when any Create block with a moving part has the block breaking texture on it. It makes the moving parts much brighter or much darker depending on the light on it. For most blocks, it's a subtle light/dark tint, but the effect is much stronger and more broken on both kinds of water wheels.
Fabric Minecraft 1.20.1
5.3 Complementary Shaders + EP
Create 0.5.1-f-build.1417+mc1.20.1
Iris Flywheel Compat 1.1.4
Iris 1.7.5+mc1.20.1
Sodium 0.5.11+mc1.20.1
Indium 1.0.34+mc1.20.1
Fabric 0.92.2+1.20.1