So the circuit diagram for the board becomes "everything connected to everything else all at once". Which means, at best it doesn't turn on. At worst it creates a short and current flows from one point to another, usually blowing up some part.
Electronics and water therefore are seldom friends.
https://techiescientist.com/does-distilled-water-conduct-ele...
This is a pet peeve of mine. We get told of conductors and insulators in school, but it doesn't work like that. Pretty much everything except a perfect vacuum conducts electricity. It's just that some materials conduct electricity so poorly that it can be rounded off to 0 in most circumstances, but there can still be measurable current flow.
[1] https://en.wikipedia.org/wiki/Electrical_resistivity_and_con...
So no, you shouldn't really consider distilled water a conductor.
Most people's experience with water rapidly destroying electronics is probably with highly ionised water such as sea water or water in the washing machine which has washing powder added.
Of course, it's worth pointing out in this case that as per the comments HZO claim they used water straight from the tap, so it's probably still an impressive enough achievement.
I'm curious how they went about sealing the external connectors (usb, hdmi), because surely those would need to be exposed and with the voltage present would act as points of corrosion. The pins on the Pi connectors are quite tightly spaced too. Maybe the AC nature of most of the signals helps there?
Outside of very clean, very lab, conditions, water conducts really well.
But your point is a nice aside, and I'm glad you brought it up.
Incidentally -drinking- pure distilled water tastes funny.
Which is a shame. It would be nice if water could be used directly in an immersion environment. Much better thermal properties than anything else, and no mess,