Definition
A waterlock is a chamber in a marine wet-exhaust system that collects cooling water and reduces noise, sized so it can hold the water that drains back when the engine stops without any of it reaching the engine.
When an engine stops, the water still in the exhaust line has to go somewhere. The waterlock's volume is calculated to contain it — which is why its size and position are engineering decisions rather than convenience ones.
Why it matters most when cranking
An engine that is cranked repeatedly without starting keeps pumping raw water into the exhaust system. If the waterlock fills, water can back up towards the engine. This is a real risk during long unsuccessful cranking sessions, and it is why the raw-water seacock should be closed when extended cranking is expected — see cranks but will not start.
What goes wrong
Waterlocks fill with carbon and debris over the years, raising back pressure, and eventually corrode or split. They are a scheduled inspection item on an ageing exhaust system.