Water cannot damage flint or firesteels. Even when just taken out of water and still wet, they are perfectly able to strike a spark. Firesteels aren't adversely affected by rust either. This has been proven repeatedly as successful attempts to strike a spark have been made with ancient flints found during excavations, even when covered in rust. Nevertheless, the tinder and kindling should be kept away from water as they'll of course lose their useful properties when wet. However, there's no need to dispose of them if they do somehow get wet. When they have dried out, tinder (whether made from linen char cloth or fungus) and kindling fully regain their useful properties.