This doesn't seem true to me, in the sense that anything is truly "gone". The water doesn't cease to exist or is converted to anything other than water. It just moves.
Right. The water isn't gone from the universe, certainly. But it's gone from the city/county water system. You've then got to wait for it to come back via the natural water cycle. Whereas it's a lot more efficient to keep as much water as possible in the human system and just keep cleaning and reusing it.