I spoke to several modelers and having a functional submarine to walk around inside is impossible on garrys mod
Yes, this is true that you cannot have a sub to walk around in. That will never be a thing unless they can make water that parts which would require modifying the entire water behavior within the source engine!
The map has a fixed water level that can not be manipulated.
Sort of. The water level is essentially a big, static cube. In the map editor, you draw out a box and then set it to water. What you're saying is that there is only one water level and it can only be adjusted once and you can't have multiple water levels which is not true. You can draw as many cubes as your pretty little heart desires for water. Whether the water level could be manipulated or not is also not relevant. If we are talking about the ability to part water with a sub so there is no water inside of it, water level is still irrelevant.