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That boat is NOT the cheating MN38S..... That is the Katariina II special made One Off for ORCi. They later scrapped the pictured hull and keel since it was too slow, but kept the deck and rig while building a new hull and keel. The increased/decreased water line you ask for is described from...

The Italian team Scugnizza racing with their NM38S in the ORCi rule is one of the most recent and biggest cheating scandals here in Europe. They actually modified the boat to have hidden ballast tanks in the aft and filled them with water before being measured to get a much shorter water line...