So, I placed your reef model and texture in my first mod. The file is placed in data/Terrain/Location, and placement written in data/Terrain/Locations.cfg. I have reworked your 3D model : 150% on Y axis, and 0 height at sea level. In Locations.cfg, if I set "On land=true", then the reef is not visible at all in game. So, I let on "false".
In GAME:
Here at depth = -17 m (checked in Mission editor). Note that the texture is not applied, the land is grey, but with a stone aspect.
Above water:
Under water:
Under sea bed:
Now, at depth = -28 m, and specular mask deleted. The same texture is applied above and underwater. Other thing : the sea surface is the same on the reef:
Crash test OK: