Question: Is soil good or bad depending on the amount of water it has.

Asaf Shnel answered on 12 Nov 2020:

That depends. For example a wetland is good for carbon sequestration because a very wet soil slows down the flow of oxygen which is vital for microorganisms to break down organic matter. In the process they release CO2 to the atmosphere, so wetlands accumulate carbon.
In agriculture you want the soil to be moist, but not to wet or to dry so plants can grow well