The Sekigahara Confederate slowly recovered from the immediate effects of the hallucinated disaster as the citizens slowly got back to work. Had the Sages intervened too late, then there most certainly would have been far too many accidents and crises to the very function of the nation, but because the Sages had noticed and intervened quickly, they were able to prevent the situation from escalating.
The people on the other hand, were merely dazed and confused. None of them quite understood what was happening and why an illusion of water had consumed the entire nation.
The Beast Incursion, on the other hand, made a subsequent return after the Water disappeared. The beast tides resumed the war against humans as beasts and monsters quickly overcame their uncertainty and followed their instincts to return attacking.