Bodies of water can range from normal water to acid (MagnaChem Acid Ocean Reprocessor) to lava (Local Nuclear Silo). The only difference is the coloration, because none of these types of liquid cause any damage or crushage. However, some bodies of water may lead to a bottomless pit, which will trigger a recovery.
Pedestrians can't swim (even animals that should be able to do so, like penguins), so they'll just float around until their oxygen runs out if they fall in the water. At that point, the player will be awarded a kill, if (s)he tossed the pedestrian there. Normally, the dropped like a stone! bonus is also granted.
Water isn't considered a "safe spot" in the recovery system. This means that when the player is underwater, the timer that controls when to save a recovery position doesn't move underwater, so it never records a "safe spot" when the player is swimming.
Underwater, the gravity works in a different way. Everything is lighter, like if the Lunar gravity powerup had been collected. This makes turning, speeding and hitting a tougher challenge. This can be partially avoided with the use of the underwater ability powerup, which is normally found in the ledges of the body of water, or inside it.
In the games, water is known as a "special volume". The gravity under these special volumes is only 20% of the global gravity, and movements are hindered 50 times more. Pedestrians take 0.002 points of damage each millisecond they spend on the water. There is also a field that sets how much damage the player loses over time, but changing it seems to have no effect.