Remember that the whole purpose of spitshining is to better facilitate layering by lessening the possibility that solvents/carrier agents will compromise the wax that's already on there.
Some liquids seem to layer and some don't. With all the solvents in the liquid waxes, I dunno if diluting them with "spit" will make much of a difference but it might be worth trying- but that's be all you'd be doing, diluting the liquid wax with water. I suspect that certain liquid waxes won't take kindly to having water mixed in so do a small area first.
I guess we seldom consider liquids since this whole idea is sorta geared towards getting a specific result with paste waxes under somewhat particular circumstances.
IMO (and this might be a point of contention), the best reason to spitshine is to allow the rapid, and thicker-than-normal building up of wax in a short timeframe. That is, doing layer after layer in quick succession at one detailing session. Using the spitshine technique for a more normal wax session (e.g., a week after your last coat of wax) will provide some benefits but isn't quite the same thing as doing a bunch of layers with spitshining all at one time.
Doing it all at once, you *need* to find some way to permit layering. Doing it at, say, weekly intervals it's likely you'll be able to layer pretty well anyhow and I seldom spitshine in this case these days (after having done it numerous times). There's middle ground when you spread a wax job over a few days, and then I do spitshine.
As for tap water vs. distilled, it's all a matter of the quality of your tap water. I err on the side of caution and use distilled when I'm not using a QD. Do chill it in the refrigerator though, at Nick T's suggestion I started doing that and I find it *is* worthwhile.
Don't let that put you off Malm's, it was an extreme/unusual situation. I sorta liked the stuff and it absolutely did *not* stain trim- I actually used it (as in used it intentionally