Objects with default size are loaded/created with the size of the graphic, not the default size of the object. This affects adding new objects to a level, as well as loading levels predating the vertically resizable water.
The player loads these levels fine.
I thought I had fixed this, but maybe not. Will look into it.
In the meantime, Cleanse Levels (as is often the case) is the workaround for existing levels - the height of 16 (or 24 where applicable) should get written into the post-cleanse NXLV file - while manual resize to the desired size is for new placements.
Nothing wrong with the right version of the editor. The problem was that I included the wrong version in the download.
Fixed now, you can grab the correct editor here: https://www.lemmingsforums.net/index.php?topic=5393.msg89761#msg89761