What does mystic water do in Pokemon indigo?

There is no Pokemon game called "Indigo". Perhaps you are thinking of "Pokemon Indigo League", which is the name of the anime series that follows Ash Ketchum's journey in the Johto region.

In the anime, there is no mention of "Mystic Water" as a specific item or substance with special effects.

It's possible you're thinking of a different item or concept from a different Pokemon game or fan-made creation. Can you please provide more context or clarify what you're referring to?