Transparent texture makes transparent texture behind invisible

It has to do with alpha transparency. It's a pain. To do it right would cause massive fps drops. That's why glass and vines for example use 1-bit transparency.

There are a number of similar issues on here, (such as MC-965 and MC-484) that are most likely related.

@Daedalus: " It's a pain. To do it right would cause massive fps drops."

That rather depends on whether Minecraft (and the underlying JVM) can make use of either SSE or GPU ability to vectorise (massively in the latter case) pairs of add then multiply instructions (or, better, use fused multiple-add where available).

("Make use" here includes using tools to bypass usual JVM limitations to access underlying APIs.)

Or course to mitigate the screams [date noted] of those whose hardware is (in computing terms) palaeolithic due to lack of a GPU should allow a reduced quality implementation as currently.

Related/Duplicate of MC-950

Not A Bug / Has Been In The Game Since First Ice Came Out.

arthur stop starting every word of your sentence with a capital!!!!

Just because this has been in the game a while does not mean it is not a bug. It shouldn't matter whether you look through air then water or just water.

Read a good explanation in MC-950

torch particles are MADE transparent by water as well as any other particles.

added screenshot of torch particles being made semi transparent, but sure if this is the same bug.

"Transparent texture makes transparent texture behind invisible" still happens up to Snapshots 13w09a/b. Please update the "Affects Version/s" tag.
Added a screenshot of a firwork light flash in front of a water surface. Same problem here.

notice how large my photo attachment is XD

Confirmed for 13w09c !

Won't and can't easily fix. Is fixed in the newer engine however.

@Grum:
Ah, good news. Would be nice to have some detailed and official information about what the new engine supports though. There's a lot of speculation out there and the current information found on the Wiki and Forums ins't very helpful (confirmed so far: Support for Java 5 will be dropped and Dinnerbone twittered several times "We are working on something so much better than Optifine"). Probably many other rendering related bugs may be obsolete with the new engine (MC-9553 for example?).

btw, whilst rewriting the engine, you should especially consider that millions of Minecraft fans still have to download Optifine/MCPatcher to make the game (and their texturepacks) even playable. Best would be to get rid of Optifine and MCPatcher completely with the new engine (proper FPS boost + implementation of all missing texture features like RandomMobs, Custom Colors, Connected Textures, Better Glass, custom skyboxes).
Just the fact that nearly all texturepacks still rely on MCPatcher should be reason enough to implement all its features to vanilla Minecraft. I'm sure Kahr will help you with this.

Maybe I'm missing something, but I've never needed Optifine for FPS issues. As long as your computer meets the system recommendations, Minecraft is fine without it.

It's less a general performance problem, it's more the lack of features of the current engine. This "transparent texture makes transparent texture behind invisible" thing here is one of many examples, the old engine simply isn't able to render several transparent textures behind each other. You need a better and more powerful engine to do this, which should still give a playable framerate. Especially those players using texutepacks suffer from the limitations of the current engine (just try MCPatchers Better Glass mod and take a look through several glass panes behind each other or place some glass blocks underwater ... there's always something invisible because the current engine can't render it).
Another problem: Not everyones computer meets the system recommendations, using many basic features of texturepacks (Custom Colors, RandomMobs, CTM, Better Glass, Better Skies, ...) is impossible for them due to massive FPS drops after patching the game. If this features would be properly implemented to the game along with a faster engine, everyone would be able to enjoy texturepacks with proper FPS and without the ned of mods like Optifine or MCPatcher.

HD texture packs work fine in 13w10a.

hooray!

Sooo... how much time till this new engine comes?

They did fix it after all, in the new snapshot 13w41a!

Fix confirmed