It is a closed loop, but the paper treats it as if it's an open loop, and counts all water use for the building, as well as all the water that went into creating any equipment used.... and the water that escapes power plants in powering the buildings.... it also includes any other buildings that might house related services. Here is the original "study" which is about what maths could be done given the above assumptions:

http://arxiv.org/pdf/2304.03271

In short, it has nothing to do with reality, and is more just an attempt at the authors to get their names out there (on bad science that the media is interested in publicizing for click bait reasons).