Just as the title says waterlogged minecarts automatically eject the occupant with only forge-1.16.4-35.1.28 installed no other mods the second screenshot is the expected vanilla behavior

I could, and I fixed it: https://github.com/MinecraftForge/MinecraftForge/commit/b6a92748708b4c336e5b6d062f8b8a257f022acd

Note: Your screenshots are confusing, as it doesn't look like you're under water at all. So you must have something removing the water overlay.

Took me a bit to understand what you meant by waterlogged, because waterlogged is actually a thing that blocks can be, but minecarts arnt blocks, and rails cant be waterlogged.

Anyways, update and it'll be fixed.