Water exclusion polygons are now mangling the terrain

Any time you now add a water exclusion polygon much of the time the terrain
applied to it degrades into a bunch of ragged and jagged edges and spikes.
Some sort of terraforming is now taking
place.

I’m not sure when this
changed, but it must’ve been recently and it was not this way before.
Previously the only thing that would happen is the water being excluded and
I’ve done it hundreds of times without any problems. This basically makes the
water exclusion function unworkable for many applications now. Are there any
plans to look into this? Something has broken somewhere unless I’m doing
something differently, which I’m not.