Well it feeds the pumps beautifully, but when the water-flow algorithms go to refill what ive just pumped out, it of course needs to pull water from the level directly above.
I was startled to notice that on the surface above my water intake, it was still all 7's... i had to scroll all the way to the NE corner of the map to find the 6's and 5's indicating where my water really was coming from.
I don't know if I'd call that a bug, really. You could post it to suggestions, asking for a more realistic water-flow algorithm, but I think it's working as intended.
How you expected water flow to be calculated:
1. Hi, I'm some tile! I'm going to figure out if there should be water in me this frame.
2. No, nothing's going on here.
3. Hi, I'm some other tile! I'm going to do like that other tile did.
4. No, nothing's going on here.
...
5137. Hi, I'm the dry tile under chewd's pump intake at the bottom of the ocean! Now it's my turn!
5138. Whoa! There's water over me!
5139. I'll take the water from tile above.
How it actually works:
1. Hi, I'm a tile full of water! I'm going to figure out what my water is going to do for this frame. And specifically, I'm whichever tile goes first when flows are calculated, possibly the one in the northeast corner of chewd's map.
2. Oh look, I'm resting on top of 7/7 water which has a path, through more 7/7 water, to a tile
not full of water on a lower z-level.
3. I'll teleport to the not-full tile.
4. Hi, I'm the next tile full of water figuring out my flows.
5. Well, I'm resting on top of some 7/7 water, but it's not connected to any non-full tiles on any lower z-levels, because that last tile went ahead and filled the pump intake tile already. So I'm not going to move around under pressure.
6. I'm next to that now-empty tile though! I'll spill some water into there. Now I'll be 4/7 and it can be 3/7 or something like that.
...
(tiles in the corner shuffle water around until you've got seven 6/7 tiles instead of one empty one)
...
3214. Hi, I'm a tile full of water, and I happen to be directly over chewd's pump intake. It's finally my turn.
3215. I'm on top of an ocean full of water, but that pump intake got filled a long time ago, so I'm not going anywhere under pressure.
3216. I and all my neighbors are at 7/7, too, because we're nowhere near that corner where a little water got shuffled around earlier. I guess I'll just sit here.