how do I reboot my apple watch 3 when it thinks it has water in it? there isnt any water in it.

Try this ...

Restart your Apple Watch

1. Press and hold the side button until you see the Power Off slider.
2. Drag the slider to turn off your device.
3. After your watch turns off, press and hold the side button again until you see the Apple logo.

If your Apple Watch is charging, take it off the charger first. When your watch is charging, you can't restart it.

How to restart your Apple Watch - Apple Support

Did you turn the digital crown? It seems you may have tapped on the button for Water Lock. Turn the Digital Crown to unlock the screen and remove that message.