Text displays with transparent backgrounds (like the default upon summoning) render their background overtop water, slime blocks, and other transparent objects incorrectly. This issue occurs even with Fabulous graphics on, which are intended to resolve transparency issues (as per MC-9553), as shown in in the first attached image.

Note: setting see_through:1b in the text display's NBT (as shown in the second attached image) does resolve the transparency sorting issue for the text background, but the obvious caveat is text rendering through blocks.