The "microbursts" I'm talking about are the small "explosions" you get from water and air that is highly pressurized like in a Hydraulic system or a Fuel Injection system. It is also known as "cavitation" . Of course cavitation is due to air entrapment while the water is more of a steam explosion, so I just used the term "microbursts" to describe both.
Cavitation applies to both. The "air" that you see in cavitation isn't air. Its basically steam (water vapor). Due to disturbances in the fluid, you temporarily see pockets of low pressure. The pressure in these pockets is so low that the water "boils" even at low temperature.
When these pockets of water vapor collapse, the wall of water closing in on the vapor travels at supersonic speeds and crashes into the metal so hard it pits.
Inside the pump, you see crazy turbulence and any trapped air promotes cavitation because it allows even more extreme pressure changes. But trapped water also allows it in the absence of air. The pressure at which water will flash to steam (at a given temp) is more easily achieved than that of diesel fuel. That's why straight diesel doesn't present an issue.
At 70° water will flash to steam at a pressure of 15mm of mercury. At the same temp, it takes a much lower pressure of 0.4mm of mercury for diesel to flash to vapor.