I always assumed that it was more a case of behavior selection:

Yes, people did drink water frequently, but those societies and groups that regularly consumed fermented drinks like wine or beer, had on average a lower chance of consuming polluted water.

As a result behavior that favored drinking slightly alcoholic drinks became more widespread by selection.

This doesn’t require that people actually knew their water sources were polluted.

This is basically the argument for respecting and following traditions even if nobody can explain why they're done.