I asked him, but he's doubting his intelligence atm. and about to quit.
No, it doesn't, and I can't get my finger on it. A terrain altitude restricted surface shader can be warped by a color and vector displacement, but why it won't warp by the altitudes of the terrain itself eludes me.
So here's two more setups to test for you smarties. It is also possible to 'warp' clouds by the altitudes of a terrain, so why not a set altitude.
Staff/Matt we (I) need something like this. Need may be an overstatement, but I guess for circumstances like a sloping/cascading river it would be good to be able to make a sloping waterline as well. Maybe it's simple to make shader/function that works?