Magnesium DOES react with water.
Besides being the second most commonly found cation in sea water after sodium, magnesium reacts with water in a number of different ways.
If magnesium metals are set on fire, they cannot be extinguished by water. In fact, when water is applied to these sorts of fires, magnesium spits out hydrogen gas as a reaction. In terms of nature's tools, a better option when trying to put out a magnesium fire is to smother it with sand.
On the other hand, if magnesium is compounded with other materials, it can become much more vulnerable. For example, magnesium phosphide, when brought together with water, immediately decomposes and produces phosphine. There is no real value to this reaction, as phosphine is highly toxic and highly flammable.
Away from the science lab, magnesium and water can happily co-exist in much more standard, drinkable forms. Over the years, natural mineral waters with high concentrations of magnesium have been prized and sought out for their health-promoting effects. In these sorts of cases, there is of course no reaction with the water. Magnesium is naturally present in the earth's crust and embeds itself into mountain or deep-well waters before the liquid is extracted and bottled.
There is even a fairly simple home recipe that allows an individual to make their own magnesium/bicarbonate water, working from a prepared compound. A small survey of people with atrial fibrillation who relied on such a product found that it was beneficial to a majority of the consumers. So at one end of the scale, magnesium can be manipulated to produce hydrogen and at the other, it can be naturally ingested and used to help soothe a medical condition.
Magnesium water is also seen as a cure-all for many of the Third World's problems related to residents deficient in this material. If people in these parts of the world can drink a proper daily ration of magnesium, their lives will be much the better for it.