When you look at a block through water shows "Looking at" as XYZ of the water even though the target block is outlined.

Looking at a block underwater...

look at one corner of the block shows position of nearest water block: -

look at other corner of the same block shows position of a different water block: -

standing in water on top of the block shows position of water block standing in: -

Looking at a block out of water...

look at top of block (not though water) shows correct position: -

look at side of block through water shows incorrect position: -