The nibs and sticks are pre-cooked, so you do just reheat those in the microwave, no water involved. The isomalt powder itself is mixed with water then cooked to 350, so don't mix the pre-cooked stuff with water!
The benefit of using isomalt is its ease of use compared with regular sugar. It doesn't crystallize as easily, it can be cooked then cooled then reheated, and it's less temperamental than regular sugar, which needs to be handled carefully so that it doesn't crystallise.
The downside is that isomalt is made from beet sugar, which can result in "intestinal distress" if you eat too much of it. So if you make hard candy out of isomalt, only give it to your enemies. Do not eat an isomalt lollipop unless you're a serious masochist.
Hmmm, isomalt lollipops marketed to brides who are having trouble fitting into their wedding dress... I like it! Lol, JK!