Why? This happens to models and brushes, but not displacements. Ragdolls in the water also get a similar effect. EDIT: I don't have leaks.
I'm guessing it's weird shadows or something. Have you treid using more than one water brush instead?
No, I haven't, but then again I can't do that when it comes to models. And they have the same problem.
Have you set cubemaps, and are they 50 units or so above the water? Already had some strange bug with the water, when my cubemap was stuck at the height of the water brush.
Cubemaps should be approximately at player eye-height; but this isn't a cubemap issue, this is the normal behaviour for the water shader and world brushes (although the effect might vary depending on your graphics card). I'm not sure if it happens with func_detailed brushes or not. But do you still see the effect if you cut the brushes at the water height, so there's one above water and one below?
This is due to the water. It's meant to be 'murky' and be moving so it takes the area around it and distorts it. This means you CAN'T fix this problem with this water texture.
Wow, if this is in fact an unsolvable issue that really, really sucks. I'll try what you said, VFIG, and I'll move my cubemap closer just in case. Thanks, everyone.
I get similar issues when I'm underwater and I look up: The blue of the sky has similar "bleed/cut" effects around the edges of the walls. (Yes, I have some env_cubemap entities nearby...)