Finola,
you have described an activity with all the features of the Framework of Inquiry. The children were engaged by a scenario from the real world (even if you might have accidently left teddy outside), and from this they are interested and want to wonder and explore the idea of ‘waterproofness.’
Did the children have to explain why they thought one material might be water proof compared to another? This gets to the heart of inquiry, where testable predictions can be made and then tested.
For a child who thinks that being waterproof means that the water does not escape (I’m thinking of nappies here), they may find that an absorbent material can soak up a certain amount of liquid and will then be saturated and unable to take in more, and this is not the same as repelling all liquids which a true waterproof material will do.