I'm trying in CAW. I assume it's not even possible in EiG?
What happens is that the water is raised to the level of the riverbank actually, so the lot gets flattened. It only happens with water though, if I place a lot on a mountain the terrain isn't altered.
Weird thing is, I just tried in a brand new Riverview Lite file and it works. The terrain paint gets altered, but at least the terrain remains how it shoud be. So... maybe the other file is bugged somehow? I don't know if that's even possible but it's weird that it works in one file and not the other. I guess I could just move everything to a new file... thank God I have only built stuff in lots, I haven't placed trees or any decor stuff yet. It would still be a pain to re-place all the custom lots exactly the same size so that my lots fit in them, but still, I could just save everything to the library and then place everything again.