Does a team still need a goalkeeper in the water?

Only at the start. Under Rule 2-1-1 (changed for 2026-28; Rule 7-3-5 deleted):

• After the start of the game, a team is not required to have a goalkeeper and may play seven field players instead, without changing caps.
• No field player has goalkeeper privileges. If that player blocks a shot or plays the ball with two hands, apply the penalty that fits the player's position and whether the action prevented a probable goal.
• Cap switches between field players and goalkeepers are still allowed.

From 2024-26 (Rule 2-1-2): only one capped goalkeeper may be in the field of play during live play. A player who enters during live play wearing an extra goalkeeper cap is an illegal player.