Plants have something called Totipotency. Any plant cell has the genetic information to make any plant cell.
So to propagate a plant you usually cut its stem and put it in water as you say.
This does two things – one it stops the cutting dying – it just lost its roots and can’t drink very well! So this makes it easy.
The water also tells the bottom of the stem its good to grow roots.
Because its just water its a zero oxygen environment – this prevents root rot, because the bacteria and fungi and viruses that cause rot need some oxygen.
Overwatering soil creates a _low_ oxygen environment. That’s perfect for rot. The plant is probably in a more advanced stage and over watering can leach the soil of nutrients.
If you get water and add nutrients and grow in that instead of soil – thats hydroponics
Tl;dr – things don’t rot when in water, they rot when they are wet.
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