The water supposedly keeps humidity in the air.
Museums keep ivory in humidity & temperature controlled conditions. I cannot afford this, but I do have a lot of ivory, not only hilts, but also ivory carvings. I remember that 40+ years ago, before having and selling ivory got you branded as one of Satan's representatives on Earth, and in any case, just plain evil, dealers in ivory always had a container of water in the case with the ivory. Even in the 1950's museums had containers of water in the cases containing ivory. I don't know if it works, but it certainly doesn't do any harm.
If a hilt, ivory or otherwise has been on a keris for a long time, and the pesi begins to rust, the rust will expand and crack the hilt. A wooden display stand with a wooden support peg should be perfectly safe.
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