Arial water focus shapeshifter does not trigger hydrophobia while in water form when in water.

But-

If the arial goes into the water out of form (or reverts out of form while underwater), triggering hydrophobia, THEN shifts back into a water form, the hydrophobia timer still continues, morale worsening, timer lengthening, for the duration of the arial's subsequent time in form in water.

EXPECTED:
One would expect while in water form for the arial to be comfortable again, as before, and the hydrophobia timer to cool back down, instead of continue to worsen.