I believe the paper was looking at total footprint including building and running data centers with open evaporative cooling, and the water "used" by civilian power stations.
I don't really see more water in the air as the most pressing environmental issue around data centers. That's better than the water being destroyed or contaminated.
The main environmental hazard of data centers is the rapid expansion of them. The running of them for months on end in the training of models... And above all else, the fact billionaires have chosen to power them in the least environmentally friendly ways (gas and disel):
https://duckduckgo.com/?q=dirty+power+ai+data+centers+powered+by