You're just shoehorning in the assumption that people had diarrhea a lot, because that's the trope about medieval Europe. But if everybody lives in a well-established traditional way (and there's no current war or plague in the area) then they will also know by tradition the springs, streams and wells that yield clean water.

In Georgian times, around 1800, coal-based industry gets under way, there's a population explosion, and many cities have properly horrific slums, latrine courtyards ankle deep, families living with pigs in wet cellars, graveyards overflowing ex-human slurry into the street. This is also when we invent bottled water, and if you can't get that, beer is a good option for safety reasons.

But in calmer medieval times, avoiding the local water can't have been so crucial, because the locals probably knew where to get the clean-ish stuff (however harmlessly brown or wriggling).