Can Water Be Used As A Hydraulic Fluid?
If ever there was a "water" for machinery, it'd be hydraulic fluid. Like how humans need water, so too do machines need hydraulic fluid as a matter of necessity. Without hydraulic fluid, there would be no means by which you could transfer force from Point A to B without creating serious friction and heat. After all, the main purpose of hydraulic fluid is to be an incompressible block, something which acts as a medium between a pump and whatever it's driving.
That raises an interesting question, though — water is incompressible. We obviously can't use seawater because the salt will just erode everything, but regular purified water is cheap, relatively plentiful, and obviously not flammable — it's even in the word, "hydraulic." It makes you wonder why companies bother with producing so many fluid types for something like your car when water can fill the role.
But, hydraulic fluid fulfills many purposes that water cannot, or even actively works against. Similar to how you need a combination of water and food, machines also need additives in the fluid to work properly. Those additives give hydraulic fluid special properties, such as allowing them to lubricate the machinery, act as a heat sink by taking heat away from the source, decontaminate the system, and more. In other words, despite the apparent primary purpose of hydraulic fluid, it's just as vital to maintaining other core aspects of the machinery's function.
How hydraulic fluid works
Hydraulic fluid is actually an incredibly versatile substance that goes beyond simply filling the hydraulic lines in machinery. For example, your car actually has multiple systems that use hydraulic fluid, namely your brakes, automatic transmission, and your power steering (if your car is old enough to have a power steering pump). They all effectively use different subtypes of hydraulic fluid, each of which is designed to fulfill specific purposes. Some hydraulic fluids are intended to handle high-heat, high-pressure environments, whereas others have specialized anti-wear properties. Some handle corrosion better than others, some are petroleum-based and some are water-based; the list goes on.
The point here is that there isn't a one-size fits all definition for hydraulic fluid, nor should there be — all of these machines have very different purposes. Just like how you can't exchange your engine oil for hydraulic oil or vice versa, you also can't straight swap your brake fluid for hydraulic fluid meant for construction equipment and expect it to work the same, despite brake fluid being hydraulic. A good way to view it is that all brake fluid is hydraulic, but not all hydraulic fluid is brake fluid. The same applies to any subtype — power steering, industrial, etc.
Ultimately, though, it all performs the same function of transferring work from one component to another. Fluid is flexible and can fill lines, so you can turn it and force it through different size lines to create different effects via pressure. Then again, so too can water.
What would happen if you swapped hydraulic fluid with water?
If you swapped in water for hydraulic fluid, everything would break down, but how long it would take depends on the timeline and exactly what work is being done. Water lacks many fundamental properties of hydraulic fluid that machines rely upon to function continuously. For example, water lacks any lubricant properties; machines use hydraulic fluid as a lubricant.
If you replaced all your transmission fluid — which is already more specialized than general hydraulic fluid — with water, your car's gears will rust together from the water corroding everything, they'll grind because the water not lubricating anything properly, and the transmission will likely overheat.
Hydraulic fluid is specifically formulated to operate within designated pressures and temperature ranges. Water is not — it typically retains heat less effectively than oil, which means it won't be as good at pulling heat away from critical areas. Moreover, it'll freeze or boil with drastic temperature changes, lowering its operational temperature range. It also lacks any additives to resist corrosion or oxidation — in fact, it does the exact opposite. You need a barrier with oxidizing agents to prevent rust on cars and in machinery. Steel, iron, and aluminum are all prone to corrosion, and adding water without anything else won't help.
It likely wouldn't be instant; theoretically, you could fill up something with straight water and it might actually work one or two times, depending on what it is. But there's a lot of good reasons why hydraulic fluid is more than just water but fancier.