What I expected to happen was...:

When I stand in a 2 block deep hole surrounded by water, I shouldn't be able to see over the walls.

What actually happened was...:

Instead, I was able to see over the walls.

Steps to Reproduce:

1. Build a 3x3x3 plus-shaped structure of stone in an ocean, with the top layer being sea level.
2. Hollow the top 2 middle blocks.
3. Stand in the hole.
4. You will be able to see over the 2 block high walls.

Screenshots:

The third image is what I expected to happen. (Built on a higher level with no water)
The second image is what actually happened. (Built in the water)
The first image is an example of the structure for reference.