It appears that Apple has changed its stance on whether a iOS device is actually water damaged. If you remember when the 13 year old girl sued Apple because her moisture sensors had gone off so Apple voided her warranty.
Well now Apple says that if the moisture sensors are red but the customer disputes and says no liquid has come in contact with the device the warranty may still apply.
I guess Apple has listened to evidence that the moisture sensors can go off in high humidity climates or near a water source without actually being in physical contact with the water source. We will have to see if this new change will affect the location of the moisture sensor in newer iOS devices this year.