Thirst is one of the basic measurements in We Happy Few, every consumable drink the player comes across can fill up this meter and satisfy their thirst. It is possible that some food items also fill the Hunger meter.
If the player were to dehydrate themselves in Story Mode, they will not die from it. Instead they'll have part of their stamina bar cut until they drink again.
Dehydration in Survival or Sandbox mode however, will make the player go through the process of dying. Giving them a few minutes to drink before eventually keeling over and dying.
In the DLC's, Thirst is disabled, this is due to survival not being the main focus of those modes, so drinks are then turned into health items that will increase each character's health.