Dr. Wu says fatty acids such as linoleic acid have been shown in scientific studies to be good for dry skin and since dry skin can look more wrinkled, this could soften the appearance of fine lines and wrinkles.
It's used in an effort to make the picture appear "smooth" -- something we saw with the Xperia Play as well -- but it leads to the unsatisfying outcome of killing fine detail and replacing it with a smeared appearance.
Dry water resembles a very fine powder (like icing sugar or flour) that has a slightly more liquid-like appearance when it flows, and if you squeeze some of it in your hand hard enough the powder combines to give you a few drops.