UTX does not use water textures.. they do however use a water class flie that makes inland water a bit better and also adds a filter to other areas. I use this UTX feature with FEX and it works great

The fliter can be changed in the settings to reflect Ice, murky water, etc.. but you can only select one. I use the CLEAR BLUE option

If you wish to disable the water class you can do that in the UTX menu under LANDCLASS/WATERCLASS - WC WATERCLASS LAYER