Megascans is currently incompatible but with the recent news of Quixel being integrated with 4.24, we are effectively being forced to come up with a workaround. So you should expect us to be compatible with Megascans with 4.23.
Our next update should be out on the 21st, which will hopefully solve alot of issues, including DX12 problems. We are staggering the release to make sure we can sort out as many issues as possible. We also have a new in our next update so we want to have extra time to prepare for that.
Water is a 4.2 specific . I apologise that we do not make obvious enough, and I have updated the docs accordingly.