For polygons representing water features, edges are automatically rounded to resemble ponds or lakes.
Water Level is used in conjunction with the Draping settings on the Source tab. You can drape a feature on the terrain and then move it 5 metres below ground level by using a level offset of -5.
Enter a value or select the property that represents the relationship between the data and the level of the terrain. To modify a property to make it accurately represent the level, click and enter an expression.
Leaving the check box unselected will treat a water feature as a river, while selecting it will treat it as a pond or lake.