First, a bunch of the world’s ice is on land, not on water, so it’s not just replacing ice water with liquid water, it’s actually adding more water to the ocean. Second, and this is not directly part of your question, but heat makes things expand, so increased global warming (which is what’s causing ice caps to melt) will cause all the water in the world’s oceans to expand which means sea level rise.
Not all of the ice-caps are floating on water. There’s glaciers over Greenland, northern Canada, Siberia, Norway, Antarctica, and several other landmasses. That ice getting dumped into the ocean will raise the sea level.
Edit: Rising sea-levels isn’t even the worst issue though. More cold, aerated water flowing through the ocean streams is a bad thing on its own as it disrupts the cycles that ocean-life has adapted to, causing problems itself. So even if sea-level rise wasn’t a problem we don’t want melting ice-caps.
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