After the latest update, you drink stagnant water on key press instead of key hold. I hope this is a bug and not intentional, because it's extremely frustrating. Anytime items end up in puddles or the pond and you try to pick them up and miss, you take a big gulp of bad water. Please change it back to key hold, as that allows players to spam the interact button to pick up items without worrying about performing an unintentional poisoned drink.

I recently tried to duplicate what you are referring to... either your game is bugged or they did a small hotfix, because the water drinking feature still works the same for me. That is to say: You must hold down 'E' to drink from stagnant water.