Here's a view of the diorama I scratchbuilt for the Model Railroad EXPO several years ago. The Mod Podge water in the rear under the arch was built on a scrap of Styrofoam. The foam is starting to outgas and is ruining the water. The water surface next to the building is okay because it was built on a square of plywood.
Here's an extreme example of failed water on an addition I helped build on an HO Pennsy layout. This is Woodland Scenic Realistic Water poured over a Styrofoam base.
The foam base was painted with acrylic paints and then the water was poured on. In less then a month the bubbling started - small fizzy bubbles at first, and everyday there were more of them. Finally, after after about three months in looked like this - like the La Brea Tar Pits.
From my experience I'd recommend not using any type of acrylic medium over a pink or blue Styrofoam base. I have not had problems using Gator Board.