When light hits the object, it can either be absorbed, reflected, or pass through (in which case it is refracted, i.e. changes direction).
Depending on type of medium, all 3 can happen at varying degrees. When light hits water, a little bit gets absorbed because water is not 100% transparent, some of it gets reflected, and some of it passes through and gets refracted.
Since water in the clouds is not a straight wall of water, but rather tiny droplets scattered all over the place, light reflects and refracts in random directions, so you completely lose the picture of whatever is on the other side of that cloud.
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