Sprinkler overspray, bore water and washing in the sun all leave the same thing behind: mineral deposits that etch a ring into your clear coat.
A water spot is not water — it is what the water left behind. As a droplet evaporates the dissolved minerals concentrate in the middle and then bite into the clear coat. Caught early it is a surface deposit that can be dissolved off. Left through a few hot days it becomes a physical crater that has to be polished out.
The most common cause we see in Melbourne is a garden sprinkler or a neighbour’s bore-water system hitting a car parked in a driveway every morning. Once the paint is coated, water beads and runs off rather than sitting in a dome and evaporating in place, which is what stops the spotting recurring.