The original meaning of 滅 is often said to be to extinguish a fire.
And if the original form of 滅 is 烕, then the reason 水 was added to 烕 seems fairly straightforward. To me, the confusion arises from the role of the component that resembles 戌. The oracle bone form of 烕 looks like 火 + 戉, rather than 火 + 戌, so my guess is that sources that say 戉 was later corrupted into 戌 are correct. I'm hoping that someone with a more conclusive answer can explain, but from the research I've done so far, some explanations I've seen for 戉's role in 烕 are:
- 戉 is phonetic. My knowledge of phonetics is rather limited, but looking at the OC reconstructions of 戉 and 烕, they don't appear similar enough to convince me 戉 is phonetic (hopefully someone can provide more details on this). 烕 also has the pronunciation that corresponds to xue in Mandarin, but I don't know if that is related or not.
- 戉 is semantic (not mutually exclusive with 1.). This is usually explained as using some kind of tool to extinguish a fire.
- 戉 was phoneticized into 戌. At a glance, the OC reconstruction of 戌 looks closer to 烕, but again, my knowledge of phonetics is too limited to make any meaningful conclusions.
- 戉 was replaced with an similar or equivalent semantic component 戌 (not mutually exclusive with 2. or 3.).