Lava oceans do not extinguish when generated under water.

Seed: -1600251074

Coordinates:  120, -50, 478

 

Placing a block on the surface of the lava immediately turns a large portion of the surface to obsidian, but not the entire ocean. 

In the picture (apologies for the quality) I had already placed a block elsewhere. 

(Picture taken with Parallax shaders to improve underwater visibility)