There is some confusion creeping in here. Jets are nearly always underwater when the boat is on its static waterline but when a boat moves its waterline changes. On a planing boat the water break away from the transom so although the jets are still below the static waterline they are not now working underwater. That the difference and Chris was on the right track
In principle a jet is a precision pump whose function is to squirt water out the back. Some of the water going through the pump is due to suction especially at low speeds but the ram effect contribution increases with speed. Jets do not need to push against anything to make them work. They work on a reaction principle and in that way they are different from propellers, ducted propellers and thrusters. The impellers also operate at very high speeds as usually there is direct drive with no reduction gearboxes. The outlet nozzles are nearly always convergent as this accelerates the flow. This is important.
One of Newton's famous laws is that if you double the speed applied to any given mass the force is quadrupled. Velocity if the jet is therefore paramount to maximising the applied force (reaction). While jets do work under water, they coming into their own venting into atmosphere as this provides the least possible hindrance to the velocity.
Think of a fire hose. A plain hose will pump out lots of water but it won't travel very far. Add a normal tapered nozzle and you now have a very powerful jet that may require four firemen to control. The reaction has increased enormously. If you now stick the nozzle in water. The force will dramatically reduce. A simple experiment that you can do with a garden hose and a bucket.
True water jets are not used on displacement vessels for all the above reasons,. Other methods are more efficient. Even the lifeboat which is likely to be semi displacement will probably have the water breaking away from the transom at cruising speed but there may be other compelling reason such as being able to operate in shallow water. Most lifeboats are not jet driven.
This was discussed in Bob Abell's Brutus thread and Paul T did not agree with me. I did not want to hijack that thread and this one presented a better opportunity for a fuller explanation.
Tim R