Will be interesting to hearing Tornado's comments!
Although theoretically correct, I can't really see this happening in the real world. It would be a very small yacht with a masthead about 2 metres above sea level!
You can actually argue this both ways. A RIB close to you showing a tricolour could actually look further away for the very reason that the lights do appear so close to the water, a reasonable interpreation being that as a masthead light it must be some distance away to appear that close to the water (having re-read that three times i'm still not convinced the sentance makes sense - but my english doesn't get any better!). The net result is that the craft is far closer to you than you think as you start to act as the give-way vessel.
A good ripost to this is that if you are that close that it matters that much then you have got it rather wrong anyway would be a fair point. However in areas where there are lots of background lights and moving craft are quite difficult to pick up it does happen - albeit nice & slowly. Equally whilst you state it is unlikely to occur in practice i'm not sure i agree. I've had plenty of scenarios where when preparing to act as a give way or stand on vessel at night it has become apparent that what I thought I was looking at has transpired to be a very different type of craft - a common one being the yacht with every nav light/anchor light imaginable switched on
At the end of the day though the best bet is always to stay well clear of absolutely everything else at night.
What are the official directives on Nav lights. I currently have a 4m RIB with an A frame. I have 3 lights that were already fitted when I bought the RIB. It has a Red light on the port side corner of the A Frame, a green light on the starboard corner and white all-round light in the top middle. The A Frame is just under 1m across.
These sound just fine, you should be able to switch them so that the allround white acts on its own as an anchor light too.