When a FloatingBlockEntity is created higher than 50 blocks below the world height (higher than y=205), it descends instead of ascends, as expected.
However, if there is a block above it, using a gravitite tool on it will not turn it into a FloatingBlockEntity. This makes sense if the block were to ascend, but since the block should descend in this case, there should be no restriction.
In fact there should be the opposite restriction, and since there is no opposite restriction, when there is no block above it, the hand swings instead of stays still (And behind the scenes, a floating block is created which instantly lands)
See attached video: (The white wool indicates blocks below y=205 and the dark wool indicates blocks above y=205)

The top blocks make the player hand swing, even though they do not change. The bottom blocks should fall when interacted with, but can't be interacted with.