Whenever holding a torch nearby the coast the land will glitch and look like water. It will only return to normal after putting away the torch or traveling far inland. This makes it difficult to see and navigate, especially at night. Noticed when playing with wendy, don't know if this occurs playing with other characters.
-UPDATE, I HAVE CONFIRMED IT DOES OCCUR WITH OTHER CHARACTERS
Select wendy and create a torch, then proceed to the coast, when nearby the edge, equip the torch and this should cause it to happen. This is an intermittent issue, however, so it may not immediately occur.