How long does it take for this to stop? If only a second or two, I think that's a side effect of having a terrible ping/packet loss and BlurredD's rather clumsy (by his own admission) method of "fixing" fake health; I've had it happen. If it keeps happening until you die or something, then yeah, that sounds like a real bug.

You might also notice that whenever you take a "fake" carrot, your position is also changed, since the "fix" is just the server resetting your character's properties to whatever they were immediately before you took the carrot. Correct me if I'm wrong.