Looking back at the Dying Light screenshot you can also notice that they made the pure black area a little thicker. In my quick prototype mask the water has to line up perfectly as there is only a thin black line. Dyling Light might even have a flat water plane based on that shot, as long as the waves of the mask do not exceed the pure black area of the mask no one would notice. Simply offset the two gradients in the material function to get a similar effect.
Additionally you could also combine mask with the alpha blended edge on the water surface to help hide the transition behind the mask.