I'd get rid of the 8 Direction control all together.
Instead set the fall speed of the character to 1/4 when in water making them fall slower. You can change movement speed and jump strength too.
Simply change them back when your not overlapping water.
This means you will sink if you aren't "jumping"
Encase jumping doesn't work because you're not touching a platform simply making a condition, if overlapping water and pressing jump simulate control jump.
Also, if you want special attributes when at the surface of the water you can have a condition
If Player.BBoxTop is Higher than Water.BBoxTop allow for extra jump or anything else. (It just checks that the player is above the water line)
Hope this helps and makes sense.