This report refers to the following contraption:

* the armor stand has Frost Walker boots

Expected Behavior

The water should freeze when the chunk is loaded.

Actual Behavior

The water does not freeze when the chunk is loaded.

Reproduction Steps

1. Place an armor stand on a block next to water.
2. Put Frost Walker boots on the armor stand
3. Fly far away or reconnect (wait a few seconds to get chunks unloaded - 30s seem good enough)
4. See if the water block next to the armor stand froze (it did not).

Removing Lithium fixes this issue.

It is working for me. Which Lithium version are you using?

Well, I didn't realize that spawn chunks are always loaded... It indeed does work as it's supposed to. Sorry for wasting your time.