If we are assuming that the balance is no adjusted to compensate for the water, then we have to realize we are measuring the mass of both the water and the sample. In this case the mass of the sample will be higher than it should be while the volume was determined based on the size of the sample
For density, which is
density = mass / volume
when we increase the value put in the formula to find density without any increase in the volume, we end up with a density that is higher than it should be.
If the balance is adjusted to the zero mark to compensate for the water on the balance tray, then there is no effect on the measured mass of the sample so it's not an issue.