Quote - As I use y=0 as water level, is it possible to use maths nodes in the Atmosphere texture to make one atmosphere setting above water level (= in air) and another atmosphere setting below water level (= underwater)?

Yes. No matter what the water level, atmosphere settings can use the y coordinate to change behavior.

The one thing that can't is IBL (image based light). In an IBL, the P node doesn't do what we expect it to at all. Pity.

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Renderosity forum reply notifications are wonky. If I read a follow-up in a thread, but I don't myself reply, then notifications no longer happen AT ALL on that thread. So if I seem to be ignoring a question, that's why. (Updated September 23, 2019)