I took the water bottle out of the backpack so that it would be handy. The it is more likely to refer to The water bottle than The backpack because A bottle is inside of a backpack not vice versa.
In "I took the water bottle out of the backpack so that it would be handy. ", The it is more likely to refer to The water bottle than The backpack because A bottle is inside of a backpack not vice versa.
This example is True.