Actually, that water regulator only controls water that gets injected into the exhaust pipe. It doesn't affect the engine cooling. It allows water to flow into the pipe during low RPM's and blocks it at high RPM's.
When water is injected into the pipe, it cools the exhaust temp which slows down the sonic wave thus giving the engine strong low end torque. As the engine speeds up, the water from the regulator is closed off (allowing the exhaust to heat up and speed up the sonic wave) thus giving the engine better top end horsepower.
Also, never run without a waterbox. It will be WAY too loud. Too many people hate us as it is.
Chester