"Water world" means that the planet has a hydrosphere comprised mostly of water - in other words, there's liquid water on the surface. Just like "Ammonia world" means it has a hydrosphere comprised mostly of ammonia, with liquid ammonia "seas" on the surface. The composition of the hydrosphere and the composition of the atmosphere are completely independent, as far as the ED star forge is concerned. If you show us a screenshot of the planetary statistics of you planet, we can tell you why it isn't Earth-like.
To qualify as an "Earth-like", the water world has to have surface conditions that are naturally human-compatible: not too hot, not too cold, surface gravity within Human-livable parameters, the right amount of oxygen within a pretty narrow tolerance (the percentage alone is not important, it has to the the percentage combined with the pressure to equate a total sea-level oxygen content the same as Earth) and no toxic gases present. Carbon dioxide is apparently considered a "toxic gas" for ELW calculation purposes, as I've found "water worlds" that seemed to be utterly Earth-like except for the presence of several percentage points of CO2.
It should perhaps be pointed out that, if current theories of Earth's formation and history are correct, then for most of Earth's history, Earth itself would not have qualified as "Earth-like": it would have been either too hot, too cold, not enough oxygen or too much carbon dioxide.
As for the islands: I think you'll find that if you examine just about any Water World up close, it will have a couple of small islands like this. They're all like that. But as far as I can tell, the star forge first calculates what kind of planet it is, then draws the map of it; Earth-likes always end up with 50-80% water coverage, water worlds always end up with something more like 99.9%.
