I have sever allergies to smoking regular died and cured weed. I have been water curing most of my grows now days. The only reason is so I can get the benefits of my smoke and not have all my nasal passages blocked up and coughing and hacking while trying to smoke a bowl.
Like the others have mentioned, it does remove everything that is not oil based on the buds, (oils are not water soluble).
If your careful with this method of curing it is as potent as regular died and cured bud is, but if you move it too much or shake the curing bowl or water dripping directly on your buds, you will lose trics.
So be very careful using this method, it can be a pain.
Like I said, I would only recommend using this method if your allergic to the terps, that's pretty much the ONLY reason I do it, and I don't do a whole harvest. You know, for friends and company.