My theory is that there is a special effects layer. This layer contains the ambient lighting effcts and the water effect. The said layer can go over all other layers like a layer 0. However do to that fact of cheapness they can only store ambient lighting or water waviness. Not both. And seeing as you can't get water to turn off, when you hit a water event your lighting goes away. The only reason of this problem is laziness and rushed games. If they had the time they could have made a 2nd sfx layer and/or a water turn off valve, but we got the best we could do.