I've tested this pretty thoroughly, using 1.18.1 version. End lotus seeds work in overworld as long as it is higher than y=46. y=46 or lower and it just wont let you place it, even if there is a big air bubble above the water (i.e., 5 blocks of water high, then air pocket).
It does seem to work much lower down if there is ONLY air above, not just a large air pocket. I'm not sure if this is intentional.
I've tested this pretty thoroughly, using 1.18.1 version. End lotus seeds work in overworld as long as it is higher than y=46. y=46 or lower and it just wont let you place it, even if there is a big air bubble above the water (i.e., 5 blocks of water high, then air pocket).
It does seem to work much lower down if there is ONLY air above, not just a large air pocket. I'm not sure if this is intentional.