Was updating the lighting engine to help prevent some of the bleed through that the mini blocks were generating and I decided to finally update the water!
The water now uses a custom pixel shader that makes the transparency of the water increase with distance from the camera. You can now hide in the water! If you are just below the surface and your enemy is further away, they won't be able to see you. The mob AI detection algorithm also reflects this change so you can now use the water to sneak up on enemies.