Cloth tape is water resistant rather than waterproof. This means that it will keep moisture at bay for a time, but eventually, an over-exposure to water will cause the seal between the tape and the underlying surface to degrade at which point the tape will fail.
Cloth tape has a high tack adhesive and will stick to surfaces when there is a small amount of water present, and the seal will last long enough for emergency repairs. The durability of cloth tape is due to the layer of Polyethylene which protects the reinforcement layer of cloth and prevents this from weakening in water. The tape can typically endure quite extreme conditions.