(Mermod 3.0.1)
Me and a friend have a server modpack going on, I added Mermod to the pack to test in singleplayer, and the player's legs were showing while being a mermaid underwater. We removed mods one by one, and came to the conclusion that the cause/incompatibility came from Palladium being present. Since Palladium is required for other mods we like, we won't be removing it, so we'd love it if Mermod could receive an update so that Palladium doesn't effect mermod's underwater functions.

Hi, thanks for the report. I've looked at Palladium's source and it looks like they have their own system for hiding body parts which interferes with what other mods do.

There's another mod called Mekanism that hides the body while certain armor is worn, which also breaks with palladium installed according to this issue. ThreeTAG/Palladium#116

The same thing is happening with Mermod. Basically, Mermod tries to hide the legs, but Palladium just makes them visible again based on their own conditions. I would recommend making an issue in the Palladium repository since their code is incompatible with several mods.