The third stanza of "Dover Beach" by Matthew Arnold is essentially a single extended metaphor that compares faith to a sea surrounding the world. It is a metaphor rather than a simile because Arnold uses the phrase the "Sea of Faith" rather than using explicit words such as "like" or "as" to make an explicit comparison between faith and the sea.
In earlier stanzas, Arnold had talked about the real tide withdrawing. In this stanza, he talks about faith receding from the modern world, which in his period was becoming increasingly secularized. He describes the world being left behind as naked. This metaphor indicates something positive, as the stripping away of myth leaves behind a clearer vision of reality. However, he also sees faith as giving value and meaning to life and therefore regards its retreat as melancholy.
The use of metaphor is effective because it conveys ideas and their emotional impact together, showing rather than telling us about Arnold's troubled and ambivalent relationship to traditional Christianity.