When you toot the whistle in a "Whistle->Stairs" screen, the Water combos become fully walkable, but any unwalkable Shallow Water tiles do not.
Also, dried up Shallow Water should no longer make ripples under Link.
I quite doubt that we need to make this a Quest Flag, unless there's a single quest out there which relies on this for some reason...
EDIT: This probably isn't very "beta-relevant", is it?
