Well you need a fan but it doesn't need to be noisy. However you are right in the longer context. Water "cooling" is actually a misnomer. The water is merely a heat transfer system. Much like a copper heat sink is a heat transfer system. Nobody would call that "copper cooling". Note this isn't a dig at HashFast the term is "water cooling" it just happens to be inaccurate.
HOWEVER the advantage of water cooling is that water is an amazingly good heat transfer system (transfers about 25x the heat per volume of fluid). So you can move the heat to a much larger areas like a radiator with 1000x the surface area of the chip and use fewer larger slower fans. No noise is a mismoner but it can be much quieter.
The Baby Jet will ship with an oversized liquid cooling system, that has much more capacity than needed to run the chip at 400GH/s. This means that the fans will be able to throttle back, and run quite slowly, and thus quietly. I don't yet have any noise figures, but the intention is that this system will result in the lowest noise possible.