The CPU can pass state to the GPU. I imagine that a lot of that state (like the clip plane for the top of the water volume, including the normal which provides

The CPU can pass state to the GPU. I imagine that a lot of that state (like the clip plane for the top of the water volume, including the normal which provides the "jiggle") was computed on the CPU, which can be updated by a simple spring model based on the object's velocity, which comes from the physics engine. In general, state like an object's velocity are commonly used for reprojection techniques like those used in temporal AA, so it's common to have around in the graphics system anyway. It's likely the particles and foam density are all computed on the CPU by this model as well. No need to do everything on the GPU.