Yes. It got four inches shallower.
If you are measuring the location from a stationary spot in space, would the bouy be closer to the satellite or farther from it?
Four inches shallower, which means four inches less depth of water. That’s what “shallower” means. Listen, if the satellite is measuring the location of the buoy relative to some elevation datum, that’s fine. Makes sense to do it that way. But the story is talking about the water column, which to me means depth of water. If the writer means something else, he or she should say so.