The last time I did "water code" was several years ago, regions were not existing back then. I just added inmformation to the c_trace approach.

It also depends on how you plan to build your level.
in_passable/on_passable is for level blocks (referred to as "water entities" in the manual), but as soon as you add models with polygon flag as level surfaces, it won't work anymore.

A water entity should be a level entity (which is a pre-built level block) with water texture.