The name is pretty much self explanatory, but this piece of code disables grabbing items underwater. Given how springs, p switches, and keys act solid while the player isn't grabbing them, these could be useful in blocking the player after they do certain actions. Might also be interesting in a kaizo sense, given how shells work underwater.
Added a check so that the buttons aren't disabled when riding Yoshi (prevents Yoshi sticking out his tongue). Other than that the code does it's job, so, accepted. As mentioned below, this code does also disable cape twirling and shooting fireballs when in water.