You’re right, it doesn’t necessarily waste the water itself. Water cycle and all that. It’s a waste of energy that was used to treat the water to make it potable, and will be a waste of energy to treat the water again downstream to make it safe to discharge back into the lake.
It could also be a waste of water itself in the sense that the availability of potable water is being poorly resourced by excess/needless use but you would only feel that in times of scarcity, but it’s technically existent as a concept in times of abundance too.
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