Previously working behavior packs utilizing rider_can_interact and minecraft:interact -> interactions -> on_interact are now broken in 1.16. The rider cannot interact when riding custom entities. (Rider interaction initially works fine for vanilla rideable entities like donkies.)

Furthermore, trying to interact with a custom entity then breaks the ability to ride ALL vanilla rideable entities (horses, donkeys, etc.).

I tested this by starting a new world, adding the (previously working perfectly) behavior pack with custom rideable entities, then riding a donkey with no issues. I then spawned the custom entity, rode it, attempted to interact (mech that fires a canon), which failed, and then dismounted.

After dismounting the custom entity, the interact ability with all vanilla rideable entities no longer works. On Windows 10, right-clicking a horse with a saddle does nothing, for instance. Exiting the world and re-joining does not fix this issue. Rideable entities are forever broken at that point.