Mmh, okay, I can see why for fairness reasons. This will mainly affect my LOA level "I believe I can fly", which makes use of precisely that visual effect of the on-terrain water disappearing when the terrain is removed.
As far as I understand this new proposal, the level in question would still work the same from a purely mechanical perspective: The water already is resized, so it would only be adapted to use the "paint" feature. This would then lead to the water still being visible after the terrain is removed. That destroys the illusion of the Swimmers "flying" on that level, but at least it remains solvable the same way.
One question with regards to the new skills though: As I've outlined in the general discussion thread, it is possible to place water on terrain, then shoot a Laserer tunnel through it, which a Swimmer can then traverse in both directions.
With the current settings, if you set the water merely to "overwrite", the water always remains visible in front of the terrain, but you can't see the Laserer tunnel the Swimmer then swims through.
But conversely, if you set the water to "only on terrain", it should be possible (haven't tried this variation yet) to see the Laserer tunnel you create, since the water disappears after the Laserer has removed the terrain. Except of course there's still water inside the tunnel, water which is now no longer visible. But at least now you could see where the Swimmer is going.