The gardening community realized there was not much information regarding how rainbows spawn in the game so we decided to look into it a bit more! They've turned out to be quite a rare phenomenon but also fairly predictable as well. Some details still need ironed out but we've decided to document our findings alongs with some screenshots to share with the community.
You can track current observations on our Rainbow Spreadsheet. If you'd like to contribute please contact us on the Gardening Discord in the #rainbow-spotting channel. We use Skywatcher+ and Garland for tracking weather.
This is what we currently know (or speculate) about rainbows: