Not sure why you cant have a "Water Block" brush or such like. Where one might have the ability to manipulate its properties. e.g. under water, local fog, colour, transparency level and so on to add such like water details. Perhaps an entity could be incorporated this way I don't know.
Currently the "Water" - water plane is a very poor substitute for water of any real game making value where water is of any significant importance during gameplay though we have the ability to make games using it on a large scale area as in an ocean or island area and such like where water could potentially form the largest surface area. No point in that so such use and games are largely ruled out.
Best one could do really is to restrict Water to flat puddles or knee high water levels as one would not want to make a serious game with water above the player eye level at the highest. You would not want to make a really good game and have water your players can go under as that will kill your great game dead. Its just not of anything like pro or even basic quality for use as a real body of water the player or game player can use at all in a game that requires water as an integral part of their gameplay.
It looks OK to get away with from above at sea level but that's about the extent of its use but for anything more than a low level as said body of water its of no value.
As with some other core existing elements this needs some attention. I don't know about water above sea level. e.g. mountain streams and so on which one could look at later but as Water as such is integral to the engine, and a major outdoor game area environment element and part of the product as distributed as is Terrain it should not be left as is to the detriment of the product should it ever be released as a full version beyond any beta. The water is hardly beta quality leave alone a finished version release quality feature for what Reloaded aspires to promote itself as which we still have to wait and see if it lives up to in any area.
As said personally I don't think if you are including any core or major feature at any stage particularly when any final V1 or whatever it will be called is released that any major included feature should fall short of any other that is included resulting in one feature element of your game falling way below par of the others.
A lot of effort is going into some engine areas and features to make them much better - hopefully, though that we have to wait and see on that. This is fine though included and started existing features and major ones at that should not be left to fall by the wayside and be left behind completely in not being of the same or similar standard to other parts of the games you can make and leave the whole down badly.
No problem if you don't use water or keep it below your knees of course so I will just have to lower mine and rest my boats on mud or turn it all to ice in my ice levels.