A waterline is the line upon which a ship’s hull is either under water – or above water. Now imagine someone would drill a hole into the hull of this ship. If you drill a hole in the hull of this ship above the waterline, it won’t sink. If you drill one below the waterline – well, get into your life jackets and into the life boats, folks!
When you are working in a team, or just working together with others, things can get complicated. There are goals that each of the various individuals may deem to be more important than others, or things they value higher than you do. The more people you are working with, and the more objectives you all have to address, the more complicated this can get. 
In this metaphor, it means: if the complications trespass a personal boundary that is “above the line”, it may not be nice, but this “hole” will not cause the ship to sink – you can continue to work together. Yet if you drill a hole beneath the waterline, trespass personal boundaries, then the entire team could down with the ship.
One thing is for sure, if you are all equally invested in the outcome, then you should be investing time and energy into the relationship with the others. Complexity has its own self-perpetuating energy. Unnecessary discussions? Assumptions being made? Half-truths spoken? All of these time-consuming distractions could be avoided if everyone on the team knew how to communicate the boundaries of what is above, and what is below their own personal waterline.
What is your own personal waterline? Do you know the waterline of those who are closest to you?