I heard the same, and wondered the same, but it has just now occurred to me that the operating principle could be not “more water”, but “less percentage alcohol”, if the “going bad” agent were biological.
as an ex matelot with connections to the andrew going back to the days of the china fleet, i’d just like to add that for the authentic taste of grog as it was last issued then it has to be pussers rum. this was the brand used by the royal navy for many years up to the withdrawal of the ration… and many sailors are still upset about it…
Una apparently thinks that half a pint of rum a day is not a generous amount to drink. I wanna party with you!
Well, not for manly, turgid, strapping examples of British seamen.
Me, I’m too drunk to drive after one beer.
Damn, you beat me to the Monkey Island reference. 
You gotta love it how the grog burns through a mug in a minute and that they can use it to break prison locks.