This water thing led to one of my most embarrassing moments ever on a flight - happened recently. I was returning from China on KA (Y class) and the section FA gave me a water bottle, presumably because I'm DM. Two Taiwanese pax across the aisle called the FA back, complained in Mandarin about me only being offered water, and implied it was because I am Caucasian and everyone else in our section was not. They keep going on and on and the FA - some young HK girl - apologized a lot in HK-accented Mandarin (which seemed to make them even more agitated), explained I was an elite, and got the ISM. The ISM came over and apologized some more and brought them water. Very, very awkward even thinking about it. They didn't bother saying anything to me in English, I assume they figured I didn't understand what they were complaining about, of which I understood every word. Then they asked for comment cards, where they complained about bad service (I found this out because they handed the card to the young FA unsealed, and she read it before submitting it. We talked in the galley and I wrote her a positive comment card, hoping it would negate their completely baseless complaints).
I talked to the ISM later, she said they were non-status pax. I guess they were very sensitive to this issue but they got it completely wrong. One of the most awkward moments I have ever encountered.
Anecdotally, I know this water bottle issue comes up all the time on CX. I've been told by a few FAs that it is one of the most common issues on board - pax seated near DMs (oftentimes it is GOs and SLs who were not offered water) get angry because they didn't get one. The usual strategy by the FAs is just to lie and say they ran out of water bottles. It sounds like as policy, DMs are supposed to be greeted and get water on long-haul flights. It is up to the discretion of the ISM and managers whether or not to do this for GOs or lower. I suspect the inconsistency probably doesn't help CX.