Whenever the dowsing rod is used on a candle/incense burner (only 2 props tested) it will cause a server crash, even though the world is singleplayer. I can provide the crash message soon.

Also not sure if related, but cannot use Dowsing Rod on Offering Pedestals as it claims, just places the rod on the pedestal repeatedly.

For lack of a crash report, I'm afraid that I have to close this issue. As for the pedestal interaction bug you report, using the Dowsing Rod on an Offering Pedestal requires that you be sneaking by holding shift when you do the right-click. Otherwise, as you say, it will place the rod on the pedestal.