If it does a little smoke, it means the potion failed.
However, the fact it gives you water is... really weird.
Water is not a craft receipe.
If you can reproduce the problem and tell me the step, that would be a lot of help ! Thanks !
Viewing post in Alchemy of Beasts - Prototype comments
This only happens on correct receipes. No clue how to replicate, but I have a save that if you go and craft morning wish will give you water 100% of the time, not sure what has caused it though. The items I have seen be given instead of a potion are nettle, water, Guareve powder, and vulpine. So it might have something to do with items that were recently gained?