Thanks to external track editors such as Track Blaster it is possible to place any track element on water terrain. That opens up the possibility for building the so-called flooded tracks, in which grass is partially or wholly replaced with water. Flooded tracks and sections are commonly used in competitions as a way to restrict shortcut possibilities.
Multi-tile elements such as large corners and loops will, depending on their orientation, look like they are on grass if placed on water. The effect is of the same nature than those achieved by terrain manipulation in illusion tracks. In most cases, however, the effect is merely visual, and the area surrounding the track will behave as water. The sole exception are chicanes on water; the flooded parts of the chicane behave as asphalt due to the fast grass bug. That actually makes chicanes useful as a way to make flooded track sections easier.