MCreator issue tracker has been migrated to GitHub.
Existing tickets have been migrated to GitHub. Please open new tickets on the GitHub tracker instead. If you do not have a GitHub account, all feature requests and bug reports from forums are still considered and checked by the maintainers.
It could spawn in the water, but it could also spawn underground. Under water is underground (level) too. Or restrict spawning per stone block so it is not spawned in the water.
Offset just sets how much should coordinates of spawn differ from the default value in height. Just test it out.