I think this is a bug and not a feature.

I noticed that campfire smoke appears to go behind water. It's hard to explain and I attached a screenshot. Here's how to see it: 

1. find some water and craft a campfire. 
2. place the campfire near the water so that you can see the water past the campfire 
   (The campfire is between you and the water)
3. Get a block under you so your a block above the campfire (it's easier to see the water this way)
4. look through the smoke at the water and you'll see that whatever visual layer the water is on is above the smoke one even if the water is physically behind the smoke.