If I remember correctly form one of the videos introducing this its a know current constraint that they are working on.
using the water system for 4.26 we have few (a lot) problems with it. The main one is that linking the water to a terrain that it’s not centered at 0,0,0 it simply won’t work, the water plane, for example the “water body ocean” will be clipped at some point, and there’s no actual way to move the outer boundaries of the water plane to align it with the terrain.
So unless you have a small enough level with the terrain centered around the origin, the water plane will just clip very badly.
Do we know if this a hardcoded limitation of the new water system or am I using it incorrectly?
(In the screenshot below the very outer boundaries of the water ocean body cannot be moved to be centered around that city block, I know we can move the city block but that’s not the point)