Easier to just simply use both spheres at exactly the same size.
This might seem a silly thing to say on first look, if you're only used to seeing surface-level shots, but even then, it's apparent what is happening with fractal displacement. Fractal displacement doesn't just happen in the upwards direction...
A power fractal with displacement amplitude of '2000m'(default terrain) will displace 1000m(maximum) each way, both up and down. The displacement is measured from the default planet normal(the surface before displacement).
This is very easy to understand once you realise what's happening, and with the fractals displacing in each direction, this will create peaks and troughs, so that the planet-sized water sphere will still be visible where the surface displaces downwards into troughs.