The player cannot swim inside water, and going in water behaves as if the player is outside of water. All blocks that require water, like sponges, corals, sugar cane... won't work too, as if the water wasn't there.

To test this, just dig a hole, and use water buckets to fill it. The player will directly fall through the water, as if it wasn't there.

You can also try placing any of the blocks in or near water, to see that they don't behave as they should (the sponge doesn't remove the water, the sugar cane isn't placed, the corals die.