Yes it does, as long as the humidity is below 100% water will evaporate, and it needs to be kept fairly low to reduce condensation which is a real problem on the ISS. Micro gravity means no convection happens so without fans high humidity air tends to accumulate in spots and condense. They have lots of fans to try and reduce this and then use an air conditioner to reduce the humidity. This captures the water, and I believe they split it to make O2 and throw the hydrogen overboard.
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