The heat's going to be leaving the building in liquid-filled pipes, however you architect it. And with 1.7MW of peak power consumption, a nontrivial amount of liquid.

It's just a question of whether you want to add air and refrigerant into the mix.

It seems they're decommissioning it partly due to "faulty quick disconnects causing water spray" though, so an air cooling stage would have had its benefits...

Has been really common in HPC for quite a while. I presume the higher interconnect/network of hpc favour the higher density of liquid cooling. Hardware utilization is also higher compared to normal datacenters, so the additional efficiency vs air cooling is more useful.

for large machines the air setup is really less efficient and takes up alot of space. you end up building a big room with a pressurized floor which is completely ringed by large ac units. you have to move alot of air through the floor bringing it up through the cabinets and back through to the acs. its also a big control systems problem, you need to get the air through the cabinets evenly, so you need variable speed fans or controlled ducts..and those need to be adaptive but not oscillate.

with a water cooled setup you can move alot more heat through your pipes just be increasing flow rate. so you need pumps instead of fans. and now your machine room isn't a mini-hurricane, and you can more flexibly deal with the waste heat.

Built in a bunker under a mountain, so reduced airflow, plus need to hide heat signatures from outside surveillance?

Also, likely they had infrastructure available, from the nuclear power they use.