I think I understand:

I thought about trees:

Tree leaves (leaves from a tree)

Trees leaves (same but from more than one variety of tree)

Same logic for water:

Water edge (an edge that happens to be of a body of water)

Waters edge (same but of more than one body of water)

I'd add that "waters" doesn't need to mean more than one body of water. It can be used somewhat poetically to refer to water in a single body. First example I could find: https://biblehub.com/joshua/3-8.htm

In tree leaves, it could be leaves from a single tree or multiple trees. Hence, you can't pluralize tree into trees leaves, tree isn't allowed to recieve a plural there. If you write it as tree's leaves, then tree is singular, and the form is possessive (whereas before it served to disambiguate from, say, leaves of a book). Then you can also pluralize tree to trees' leaves, and now it's leaves from multiple trees.

Would the same logic also invalidate ‘waters edge’?

> Tree leaves (leaves from a tree)

or it could be the single tree is vacating the area

> Trees leaves (same but from more than one variety of tree)

or multiple trees are vacating the area

we could equally turn edge into a verb as well. so now we have a whole other meaning outside of an apostrophe

Hadn't even considered that. I think that confirms "waters edge" can be grammatically correct. (random example: "as rain falls, flood waters edge closer")

Hmm, it seems like water can be plural or singular purely depending on the author's preference. I didn't realize that until now.

Yeah, that could totally be by design. For example,the book "Rainbows End" is not "Rainbow's End" specifically because the meaning of the first is intended, not the second.

Though when it comes up in the book it's clear that it was a mistake (or a cruel joke) in that context.

In the book's context. But in the meta-context of why it's in the book, the author's intent is to fool you into thinking it's a mistake, when it actually isn't. Specifically, it's supposed to suggest the technological singularity not being a pot of gold but the death of history (and possibly humanity).