OSMOSIS

Osmosis occurs whenever a liquid solution is in contact with a semipermeable membrane--i.e. a thin, porous wall whose porosity is such that some, but not all, of the components in the liquid mixture can pass through the wall. A semipermeable membrane is a selective barrier, and many such barriers are found in plants and animals.
Osmosis gives rise to what is known as osmotic pressure which will cause a flexible film to form a balloon. In the case of a paint film the balloon can be in the film or at the substrate. When this is on the metal substrate there may not be corrosion due to a lack of oxygen.
Substances such as solvents and this includes water, can pass through such a membrane in a molecular form but not in a liquid form. The effect is for the liquid to pass through from the less concentrated to the more concentrated solution - a dilution effect. A paint film can act as a semipermeable membrane. The type of film as well as its thickness influences the tendency. A rigid film will not be sufficiently flexible and thick coatings are less permeable.
Should a water-soluble material be present in a film and this film then submerged in water, water molecules move to the soluble material and a solution will form and so there will be an increase in volume around the soluble particle so creating a blister. The growth of this blister will depend upon the concentration of the solution and so when distilled water* is used the result is more pronounced. The growth will also depend upon the strength/flexibility of the film and the adhesion.
As the effect can present itself if the contaminant is in the film or on the substrate. It is important that all water-soluble contaminants are minimised or eliminated.
Problems created by this effect are particularly prone to cause problems with marine paints for submerged surfaces. High pvc primers cannot blister and do not form bubbles because of their rigidity. Problems are greater in fresh rather than in salt water. This is often seen with glass fibre boats - they may blister in fresh but not in salt water. Using a layer of very fine glass fibre (veiling) in the outer or gel coat to increase film rigidity can counteract this.
This effect should not be confused with the type of blister which appears on damp walls. This is generally caused by water coming through the porous substrate from the rear. Although porous, rigid and reinforced films can assist by resisting the blistering tendency the best solution is to find out where the water is getting in and seal it off.

*Note - There is a tendency to confuse distilled water with de-ionised water. De-ionised water is free of ions but this does not mean that there is no soluble non-ionisable substance present. This should be taken into account when considering rinse off after pretreatment- soluble substances can still be present on the surface after drying.