In Minecraft 1.12.2 grass and mycelium do not suffocate after being put underwater. It will not spread (Like I intentionally though was apart of the vanilla game ) I have a screenshot of the issue below, and I made sure that it would not spread or suffocate by putting the random tick speed up to a high level. the grass and mycelium on top spread almost immediately while the grass and mycelium underwater did not spread or suffocate.