minecraft 1.16.4, fabric api 0.25.1, Canvas 1.0.989, Packages 1.1
I'll let the screenshots speak for themselves, was reproduced in a lightweight instance with only the relevant mods

in my dev environment it seems to crash whenever i look at a package or press shift around one, so, that's also pretty cool

ed: only happens when canvas's Experimental Rendering Pipeline is turned on, and the thing at fault is the text rendering

looking into why this happens and i... have no idea!
pretty sure it's something with FakeSprite being cursed, which is fair because it's cursed
i've asked around on grondag's discord, hopefully someone can figure it out

as a goofy temporary workaround, you can change assets/packages/models/block/package.json (original here) with a resource pack and replace packages:special/frame and packages:special/inner with references to whatever other textures you want

this effectively disables the dynamic retexturing stuff, at the cost of... the dynamic retexturing stuff being disabled, so all packages look the same (but at least they won't look broken)

futzed with it a bit, with some hacky Canvas-specific workarounds it- well, at least it uses the right texture? i have no idea how i managed to bend it into an L

compare no canvas