if you manage to create a water mask based on the intensity, you could use it as a valid pixel expression.
For example, you create a binary raster by applying a threshold on your backscatter intensity in the band maths:
Sigma0 < 0.05
This would result in a raster product (lets call it ‘watermask’) where 1 is water and 0 is no water (depending on the threshold).
if you then enter this in the valid pixel expression of your displacement you can formulate
watermask == 0
which then makes all areas of water transparent.
Have a look here on the generation of water masks:
Where is the image from by the way? Looks very nice!
Edit: A second option is “Land/sea mask”, but as this uses a comparably coarse DEM, it won’t bring satisfactory results.