My sharpening godfather (he's younger than me) David Polan once did an experiment. He did 100 laps on a Coticule with water and test shaved. Next day he did 200 laps and test shaved again. A day later, 300, and test shaved again. (The numbers may be slightly different but you get the idea). In then end, he had done well over 1000 laps. The shaves just stayed the same, which was excellent, according to David's standards.
In my personal experience, I have never seen any evidence of overhoning on a Coticule, neither with slurry or water, and I check all razors I hone with a stereo microscope.
So far for "overhoning".
The other question is more interesting. Is it possible to dull the edge by finishing on water? It often happens that someone who's learning to hone reports that his razor got "duller" on the next hone. I think that what happens is this. Most synthetic hones in the 1K-4K region leave a microscopic sawtooth pattern at the edge. This pattern lends great performance to an edge. The spiky points can penetrate a hair's shaft easier than a smooth edge. Compare it to how easily a serrated knife cuts through a tomato skin, while a non serrated knife really needs to be very keen to do it with equal ease. So why don't we equip all our razors with these micro-serrations? That is because the edge also touches our skin. We try to sever hair and at the same time avoid blemishing our skin. A smooth edge is much better for that, but it does require more keenness. So on the next hone in the progression (could be a Coticule), we aim to reduce the microscopic sawtooth pattern. That happens pretty fast. The edge looses it's performance advantage withing few laps. But the naked keenness still needs to rise. Hence we perceive the edge initially as becoming duller. If you go too soon to a Coticule with water only, possibly all that will happen is that the edge smooths out the teeth, and you end up with a razor that lacks keenness, yet your finisher lacks the power to do anything about it. So you end up with a very smooth and very dull edge. Duller than it was before you finished it.
Coticules are fine enough finishers to be bothered easily about this. I have been told once, that in Japanese sharpening tradition, it is considered normal that the finest stones only make a difference in the hands of the master.