Where we see it all the time is in a pass or mouth of a river when you
have an onshore wind (from sea to land) smacking into an outgoing tide
or current, the waves will be a washing machine on steroids. If you
can hug the shore and get out of the current it will be reasonable as
long as you don't run aground..
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Yes, that's very common. The inlets all along the Atlantic coast are
particularly dangerous under those conditions except for the ones with
big breakwaters. We've also seen it in the eastern Caribbean where
the trade winds create big easterly waves but the gaps between the
islands are tidal. You can be going along in the normal 3 to 6 ft
seas and suddenly see a patch of white water ahead where the waves are
breaking and twice as high.
Jupiter Inlet in Florida is notorious for that plus the bottom is
constantly shifting due to wave action shoaling. The Coast Guard
considers the inlet to be "non-navigable" and boating guides advise
to use another inlet north or south of Jupiter. It's ok on calm
days but can still be tricky due to changes in depth. Here's a
link to a video of a guy in a small boat exiting the inlet on a
day that was not as bad as it can get: