I dropped my phone in water and later the same day found the Face ID has been disabled. Could that be the reason why Face ID has been disabled out that

It could be, get repair, see: iPhone repair and service

iPhone Repair - Official Apple Support

Swapseats1 Said:

"I dropped my phone in water and later the same day found the Face ID has been disabled. Could that be the reason why Face ID has been disabled out that: Would dropping the IPhone in water damage the Face ID ?"

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Perhaps: You might be able to get it to work. Try the following to get it up and running...

Troubleshoot the Face ID app:

Start here: If an Alert Says Face ID has been Disabled on your iPhone or iPad Pro - Apple Support

A Few Other Sites to Try:

• If Face ID isn't Working on your iPhone or iPad Pro - Apple Support

• If you can’t Turn on or Sign in to iMessage or FaceTime - Apple Support

• If you can't Make a FaceTime Call on your iPhone, iPad, or iPod touch - Apple Support

• If you Experience an Error when Trying to Activate iMessage or FaceTime - Apple Support