At high enough altitude, the jet fuel evaporates. Even so, think of it like dumping a bit of soda into the ocean. It doesn't simply fall, it spreads out. Droplets get caught up in different currents. Some of it just mixes with the water. Same idea. The fuel thins in the air (spreads out). It evaporates ("mixes" with the air). By the time any reaches the ground, it's like tiny particles, not rain. Tiny particles are still pollution, but it's not as bad as getting rained on by pure jet fuel.

“Grey” water from the lavatory and galley sinks is dumped overboard through electrically heated drain masts.

It is much cheaper and simpler to drain it overboard rather than store it. Dumping it also makes the aircraft lighter and more fuel efficient as the flight progresses……….. (better carbon footprint?)

Between flights it drains onto the ground or unsuspecting ramp workers under the aircraft. In cruise flight the outside air is cold enough for the water to freeze instantly and form small contrails.

There are many photos online showing these mini contrails that form briefly while the water is actually draining:

737 can't dump fuel. What it could be is the fuel overflow for the wing tanks. If it's hot the fuel can expand as it heats. If the tanks are full, there's nowhere for it to go so some can escape out the overflow