I have a thought on this.

Forget the water plane.  Create a ground plane and just apply a water mat to it.  IF that works then it's a easy work around.  If it doesn't, then create an alpha plane, enlarge it and apply a water mat to it.  Hopefully it won't look bad as it ends with your horizon.  Still you shouldn't have this problem so I am not excusing the bug but rather trying to find a suitable work around.  Hope this helps in some way.