Actually, it's usually the opposite. No one needs to tell you when to push and when to not push (actually, directed pushing is associated with a greater likelihood of tearing). Your body will know what to do and you're less likely to tear if you just listen to your body. You're probably also less likely to tear if you're upright as it's much harder to push a baby out when lying on your back. Not that you have to have a water birth to be upright (I didn't birth in the pool, but did birth upright on all fours), but certainly it makes it harder for you to get in a position that's likely to lead to a baby that's hard to birth. Midwives can see baby just fine in a normal birth pool. They sometimes don't like you to use a bathtub because then it's hard to see. But they should be able to see just fine. They'll often have a torch and a mirror, or if you have a home birth, you provide them with them, as it means they can see what's going on without making you change positions. Anyone can tear though, and a lot of times, it just has to do with the speed and intensity of pushing right at the end. Just because a midwife can see baby coming and tells you to not push, doesn't mean you'll be able to. Your body just pushes. You can't not push. So if there's a reason baby needs to be born quickly, your body will do it, regardless of what anyone else tells you.
My daughter came out all in one push pretty much. I'd had a really long 2nd stage, with 4 hours of on and off pushing, in part because she was back to back and turning to come out in the right position. When it came down to it, my body just pushed. No one could have told me to stop. I did have a 2nd degree tear. But it was no big deal. I did have a birth pool and I got in it for about 20 minutes, but preferred to be moving around. So I had her on all fours in my bedroom. The tear wasn't an issue at all. I didn't feel it when it happened and it didn't cause any complications. The midwives did the stitches with me lying on my bed with my husband and daughter. Had I been in the pool anyway, I would have probably been in the exact same position, so they would have been able to see just as well.