Indeed I do have plans for somewhat realistic and supposedly very performant Fluid Physics. Do note Blocks are 0.25³m³ instead of 1m³ like Minecraft.
Fluid Blocks will have a Flow Direction in them.
If something is in front of that Fluid Blocks direction that happens to be another Fluid Block with a Flow Direction, it will not do anything (apart from pushing things that are inside the Fluid), and stop trying to update.
If nothing is in the Flow Direction, the Block will try to move forward in some way, by spawning another one in front of it (or to the side if it hits something), but WITHOUT removing itself.
If there is nothing flowing into the Fluid Block, it will vanish into nothingness, that way it wont end up creating Infinite Water on the frontal end.
There will be conditions to remove the flow direction of Fluids, like for Lakes and such.
For Rivers there will be tiny River-Spring Blocks, which function as infinite Water Sources. The Water that comes from multiple of those tiny Springs will merge into a full grown River, which then flows until it reaches the Ocean and merge-vanishes.
The Ocean itself is considered Infinite though, kindof like how GT6 Ocean Water works right now.
The flowing Water Blocks make long distance Water Transport from those tiny Spring also very lagfree, since you can lay a “pipe” from a Spring to your Base. This does not mean there wont be regular Pipes with different Fluid Mechanics (for inside the Base), this just means you can redirect Rivers to wherever you need them, especially if you wanna do Water power and such, or an Aqueduct.
Took me a while to write this, go ahead and ask questions, while I am away for a short while. ^^