Minecraft wiki entry for Development_versions, associated text: Generate in crimson and warped forests.
Can be placed on flower pots, dirt, coarse dirt, farmland, podzol, nylium, soul soil, and grass blocks.
Bone meal can be used on fungi to grow it into the respective huge fungi when placed on the same type of nylium.
Unlike mushrooms, fungi cannot spread.
Fungi have a chance to generate by applying bone meal directly to a nylium block, making them renewable.