It won't. If there's an alternate entry point for air, the engine won't vacuum up water through the CAI. In a sealed system, like, for example, the stock intake of a Nissan Sentra or a Chevrolet Optra, once the main intake tube (very low on these two cars) goes under, the engine vacuums up a ton of water... and that will kill your engine. I'm sure a lot of ex-owners who've lost their engines to floods (lots of dead Optras in Malaysia/Indonesia... count me in as an ex-Sentra owner) wish that the stock system had a bypass.

In the case of a CAI with the bypass, moisture and small droplets of water come in, but they will only be burned off in combustion, and the engine gets some moisture out of the air anyway, that's why you have water coming out of the muffler sometimes.

Of course, the bypass will only work until it gets submerged itself, so you still have to be careful.