I can actually see some sense in a water-resistant phone having moisture detectors. The waterproofing is only supposed to be good if all of the port seals are in place and closed. So if an owner took the phone into a damp environment with these open, they are not using it as intended and it would be their fault if it got damaged.
Not saying that applies here, just noting that as a scenario in which it would make sense for them to reject a warranty claim.
Now I'm not a lawyer, but I think that as long as all of the ports were sealed then if the immersion you describe damaged it they should repair or replace. If I may quote from
their own promotional website:
"[2] In compliance with IP5/7 and IP5X, Xperia Z is protected against the ingress of dust and is water resistant. Provided that all ports and covers are firmly closed, the phone is (i) protected against low pressure jets of water from all practicable directions in compliance with IP 55; and/or (ii) can be kept under 1 metre of freshwater for up to 30 minutes in compliance with IP 57. The phone is not designed to float or work submerged underwater outside the IP55 or IP57 classification range and should not be exposed to any liquid chemicals. If liquid detection is triggered on the handset or battery, your warranty will be void."
That does say that the warranty is void if liquid detection is triggered, but it also says that it would be OK in deeper water and for longer than you subjected it to. So if the ports were all sealed tightly at the time and yet it got damaged, despite their saying clearly that such usage should not damage it, I'd be tempted to argue that this means that the sealing in the handset was defective, and hence the goods supplied were not fit for their intended purpose (as laid out in the Sale of Goods Act of 1979).
The problem is that I could imagine it coming down to your word against theirs about whether ports were sealed.
BTW, I'm not a lawyer but it's clear that whoever wrote that footnote isn't a chemist. "should not be exposed to any liquid chemicals" but "can be kept under 1 metre of freshwater for up to 30 minutes" - what do they think water is if not a liquid chemical?