in spite of the ads, in spite of ratings, it would be best to keep the watch dry as much as possible. getting it wet could void the warranty if you need to send it in.
I moved this to the Galaxy Watch forum for more specific traffic. OP, if you have one of the other variants of the Galaxy Watch (like the Watch Active 2), let us know and we can move the thread again to the appropriate forum.
The Galaxy Watch is waterproof all the time. The mode that you are referring to is water lock mode. It restricts touch sensitivity while submerged (think swimming) because swirling water makes the watch believe it is constantly being touched. This function is on the Galaxy Watch and the Galaxy Active lines. Don't know about the older S series.