Almost every other year they try again to make real water work inside of a house and it never goes well. Depths of Fear caused a ton of problems, Dead Man's Wake lost an entire room, even as far back as that last TWD house I remember they were having issues maintaining the effect.
Water pools. It can build up. It gets dirty and has to be replaced with lots of new fresh water. It has to be drained, and if it's combined with things that should not be drained, that can cause catastrophic problems. Water stains and leaves heavy marks. It can ruin paints and warp setpieces. It can evaporate and seep through things you don't want it to. It can ruin foundations, and cause incredibly expensive damage to permanent buildings. It causes slip hazards; not just inside the house, but also well outside of it, because water likes to stick too. It clings onto shoes and clothes, and continues to drip and spread far outside the space you had planned to use the water. Meaning you need to plan for proper drainage systems not just in that room of this one house, but all around that immediate area. Water will rebel against whatever plan you have set out for it.
These houses have incredible scope and budgets, but not nearly enough to keep temporary water systems maintained and consistent for 60+ taxing nights in a row during hurricane season. IMO, it's simply poor planning and design to include water as anything but an added flourish inside of a house, if that. To make it the entire identity of a house, or to waste the finale scene of a huge IP like Terrifier on an effect that guaranteed will not last, is a complete failure on the parts of management and design.