Some people call them "water towers" or "water glitch". Algodoo users have been reporting this behavior since 2009 when Algodoo was first published. It's a quirky behavior of water which never got fixed, and will probably never get fixed.
I’m pretty sure i figured out why it happens, it’s definitely something to do with the nature of balance points. Probably that the game has no idea what direction to send it because its aligned on a balance point and patching it would be to change the nature of how blocks are liquified.