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")