The issue here is how alpha textures are displayed under water when viewed from above the water line. If a texture is transparent in any way, then it is not displayed properly. It is especially noticable when only the edges of a texture are alpha, e.g., when a texture is used to create an underwater plant or animal on a flat prim.
Examples are provided in my Hotline post. In the Linden response, Robin says that this is a complex problem referred to as alpha sorting. While I believe that the general problem of sorting all alpha textures in world *is* complex, it's not clear to me that the special case of handling the water line is so complex. SL just needs to make sure that the water is the last alpha applied.
Thus, this proposal is not asking that the alpha sorting problem be solved in general. Only that it be fixed so that the water line is always sorted last (or first, whatever works
