Inserting a text Watermark automatically moves all text down one l

[SLD, frequent Word user]

In Word 2003, when I try and insert a text watermark from the
Format/Background menu, on pages with .3 or less margins, there is a flicker
and all the text automatically moves down one line. Clicking Undo (or the
blue back arrow) removes the watermark, but DOES NOT move the text back up.
I need the .3 margins and a ‘CONFIDENTIAL’ text watermark for this particular
document. I tried changing the ‘Auto’ size option, with no difference.

Is this an unnoticed and unfixable glitch in Word 2003? How can I insert
the watermark without the text being moved down? Also, what size text is the
‘Auto’ size option?

Stuck. Thank you in advance.