I thought that was just one of the list of things that it could could been said to be out of warranty. Water damage being the other. Plus using the watch in the shower was not recommended by Apple right?Except people have swapped out their water-damaged AWs under the standard warranty if they fail to perform within the scope of the IPX7 water resistance rating (due to a manufacturing defect).
They're saying his AW is modified. Water damage doesn't really "modify" the AW (except of course to croak it). It'll be interesting to see how exactly it's "modified" when he gets it back.