Water is one of those contaminants that will sneak into your system unnoticed, usually by way of condensation, entry when hosing down, or internal coolers leaking.
It is one of the most common causes of failure as it causes the oil to degrade, build up acid or base and under load, turns to steam with an expansion factor of up to 2,000 times, which causes mini nuclear explosions on the loaded zone of the surface.
It is capable of tearing metal out, destroying surgace integrity and eventually leading to component failure.
If your oil analysis indicates that your system has water contamination, do not underestimate the damage it can cause.
Change the oil, identify and rectify the source of the contamination. In engines, water is more damaging as the sulphurs combine with water and oxygen to cause the formation of acids, which literally eat away at the bearings.
Engine oils usually operate at high temperatures which will evaporate any condensation entering, hence any water in engine oil at any level usually indicates internal leaking.
Never ignore a positive water test, it will eventually lead to costly repairs.