Monty Walden from Ancient Forest Woods answered:
This is a bit of a difficult question to answer because it depends on so many variables. I do not know of any instances, or have any experience with kiln dried woods that have been submerged in water for a long time. I imagine that because the cells in this wood are "lifeless" and it is probably found in shallow water, the wood decomposes over time.
As far as wood in log form, the wood is well preserved when sitting in deep dark waters. When wood is at the surface and exposed to sunlight, the wood deteriorates over time, much like you will see with driftwood. Wood that is not exposed to air or sunlight, will maintain its cell structure. There can be some erosion of the bark, and cracking if there is excessive water absorption by the wood. Otherwise, the only noticeable effect that the water has on wood is to leach resins from the wood. This condition makes for more dimensionally stable furniture in the long run as there will be no dimensional changes due to the drying out of resins.
Different woods are affected slightly differently depending on their cell structure, but the specific effects have not been documented. I am also uncertain as to the difference in effect from fresh water to salt water, as all the wood that we are recovering comes from fresh water sources, but it is imagined that the salt water could be more damaging.
Rot is a condition that occurs from wood being in contact with moisture and air combined.
As there are many hardwood and softwood logs being recovered from our lakes and rivers today and being used in a large variety of building projects, there is no indication that submerged wood is of any lesser quality than when it was first logged.