Remember that nothing we want to smoke is water soluble. That means it will not leach out into the water. The only thing that can happen is trichomes can break off if you treat the buds roughly: be gentle.
#1 Terpenes, nuff said. (ok I'll throw you a bone here, one of them, myrcene, directly affects the uptake of THC)
#2 You are creating an environment where bacteria/fungi would thrive (food service this is known as the danger zone, wet/humid between 40-140F. If you see any signs of fungal or bacterial infection or had soil contact with the flowers consider yourself warned, this method should be reconsidered in light of this info.
#3 There are many other cannabinoids and terpenes which may actually be lessening the effect of the H2O insoluble THC and this may also contribute to the potency of water cured.
#4 You can water cure already cured bud to remove contaminants, considering you take #2 into account. Also if you water cure freshly cut plant matter, you are dealing with the living plant still. The shock from being almost 100% unable to uptake any gasses (CO2/O2) which are normally used for metabolism/photosynthesis plus the shock from being cut/trimmed is going to cause the plant to overproduce anything which relates to defense/shock. THC levels are known to be linked to abscisic acid levels (AA is a known plant stress hormone). This may also result in increased potency.
#5 This method (because you are already sacrificing flavor and thus the dehydration/flash dry step is not going to detract in that arena) is a potential option for someone who needs to harvest meds from an infested plant but wants to reduce chances of re-infestation from curing/cured meds. Just remember to set the dehydrator to above 140 for more than an hour and damn sure everything is gonna be dead. This process may also result in more effect decarboxylation of the THCA to THC which may result in more potent product, especially if you plan to cook with it, and don't normally include a decarbox step.
#6 Not trying to rant here but I have a bit of experience with this method and my results match consensus on a number of other forums (and possibly threads I read here at RIU) which is that water cured makes great stealth nug because the smells people associate with MJ are typically terpene based and thus have been selectively removed from the product. I have also enjoyed the combination with normal (hang-dry) cured for an effect unique to either.
I've done it before. From what I understand (I could be completely wrong), some terpenes are water soluble so water curing kills the taste. Although the smoke is generally very smooth since a lot of other contaminants are filtered out...
It may also be that the plant is differently metabolizing the terpene precursors to make other terpenes which are water soluble too or ones that we just aren't familiar with. Water cure definitely smells different, but not grassy like poorly/half-cured product. I actually vape mine, so I kinda have to get a bit more personal with the flavor and usually don't like it very much. However I have never gone less than 6 days and also don't really water cure anything that would be just fine otherwise so definitely not tried it with any primo. You'd probably catch me dropping primo in the ol' turlet long before I water cured its flavor away. But there is something to the potency issue, I'd love to get around to running some analysis on a harvest which is cured both ways.
Hope some of this was helpful
MPP