It's where the ball last crossed the margin of the hazard. It looks like the ball crosses over dry land just before it ends up in the water. So maybe the spot to drop is a yard or two further back.Are we sure that is correct? You cannot drop closer to the hole. It isn't where your ball splashed down, it's where it crossed the line. I am assuming for the sake of this discussion, we are treating the trees like a lake. This is one of those goofy rules that very rarely gets used correctly.