Then think about, why even in modern cars floaters are used!
The mistake you make is to assume an ideal set-up, which you will never find in reality. Or did you take into consideration, that the two electrodes and their mounting can be contaminated by salt, or chemicals, which in combination with humidity or other water will cause leaking paths for your signal, telling your electronics "water is reached" even when it is not?
Or did you take into consideration, that the conductivity of water can astronomically change, when your water is a bit contaminated with salt or dirt?
It's extremely difficult to find a proper threshold, which in all cases reliably tells you when "water is reached" and when it is not.

By the way, all the above has nothing to do with your contacts, or whether you meaure with DC or AC. It has to do with unpredictable conductivity of water and unpredictable paths of leakage for the signal.

Kai