There is a school of thought that says high insulin levels will block stored fat from being released from fat cells in the body. In the early stages of Type 2 insulin levels in the blood are likely to very high - the insulin just doesn't work properly due to the phenomenon of 'insulin resistance'. Experts who subscribe to that school of thought recommend avoiding carbohydrates - so little or no fruit with breakfast, if you want to lose weight. This will reduce the amount of insulin in the blood, enabling fat to be released from fat cells and burned. Some even suggest that this is necessary for a Type 2 - that it's difficult or impossible for a Type 2 to lose weight if, for example, they eat much fruit (or bread, or any other carbs).
This concept is controversial (at least it is for me), mostly because it does not fit with experience for you, or for me, or for many others with Type 2. If the 'insulin blocks fat burning' theory does hold water it certainly doesn't apply to everyone with Type 2. As a result different experts have different, sometimes strongly held views on the subject of the best way for a Type 2 to lose weight.
As to drinking water - there are many reasons given by experts as to why this is a good idea but for me the reason is purely practical. I find that when I'm losing a lot of weight my digestion slows. I've read this is due to the body trying to extract as much energy from food as possible. Drinking plenty of water helps to keep the bowels moving.