It doesn’t in a really moist layer. Ice condensation nuclei are relatively rare (thus the silver nitride seeding idea), so a lot of times ice clouds form when a parcel of air gets supersaturated. This is pretty common.
Even more, because all the energy is from "burning" H2 only, no Cs to burn. Whether or not visible contrails form is a separate question. Even transparent water is highly efective outside of the visible range.
Depends on whether the plane currently takes off with any water that could instead be replaced mid-flight and/or if dumping the excess water at different temperatures/places could avoid the issues.
I would be shocked if the airplane has use for water in the same order of magnitude as the combusted fuel multiplier.
Jet-A has around 43 MJ per kg. An A320 burns around 2.5 tons of fuel per hour. Hydrogen is about 3x as dense on an energy basis, so call it 0.8 tons of hydrogen per hour. Hydrogen combustion to water has a mass ratio of around 9:1, meaning an A320 would be creating over 7 tons of water (~1500 gallons) per hour of cruise flight. The potable water tanks on an A320 are around 50 gallons or around 2 minutes of cruise flight (that’s potable water tanks only). It’s a different order of magnitude.