Cubemap reflection is for lower quality water. It's not a real reflection -- it just reflects the skybox basically. Higher quality setting actually does proper reflection by reflecting the objects. The water quality was set up like this in Windward, from what I recall:
Mobile (transparent water, specular, no soft edges)
Low (soft edges, skybox cubemap reflection)
Medium (soft edges, reflects only certain objects)
High (soft edges, reflects most objects)
Ultra (soft edges, reflects most objects, higher resolution of reflection)