Avoid fire on a battery-powered device
The device has a non-removable 5V / 5W battery.


The device may be charged with 5V / 5W power supply, but the battery is most likely a 3.7V Lithium-Polymer type.


  The device started heating and it began smoking a bit so I took it and
  put it in a bowl full of water.
  
  I guess this wasn't the best idea


If the Lithium-Polymer battery was heating and smoking then this probably was the best idea. When a Lipo battery is shorted out it can heat up enough to go into thermal runaway, causing it to catch fire and explode. Immersing the battery in water cools it down enough to prevent thermal runaway (even when it is smoking profusely and has flames shooting out of it - ask me how I know!). 

Since your device is still working that suggests the short has gone, so you could remove it from the bowl, disconnect the battery, and dry the device out thoroughly. You should then disassemble it and clean off any corrosion which may have occurred due to electrolysis while it was under water.   

If the battery is damaged in any way (cuts, burn marks, 'puffy' or has a 'chemical' smell) then put it back in the bowl of water and leave it there until the voltage drops below 2V. You can then safely dispose it in the trash.