Summary:
The sponge placed by the command only removes water from 1 chunk. The same applies to flowing water. The water outside the chunk in which the water was removed is not renewed. This means that the water will not spread, the flowing water will not be removed (renewed) even if the block from which it flows is removed.
Steps to reproduce:
Place water on the border of the chunk (about 3 blocks from the border).
Place a sponge next to it using the command (/setblock, /fill).
Can't define the boundaries of chunks?
Steps to reproduce 2:
Load the attached world
.
Use the world placed buttons to reproduce the problem.
Observed results:
Blocks of water outside the chunk in which the sponge is located have not been refreshed.
Expected results:
Blocks of water will update just like placing the sponge by hand.
Video:
This is not specific to sponges, the behavior is the same with any blocks placed by commands. Placing any blocks with commands only triggers block updates within the chunk(s) in which the blocks are placed, unless blocks are placed on a chunk border.
I doubt this is intended per se because it makes block updating inconsistent, but it could possibly protect against some unwanted block updates and lag/corruption when working with very large builds.