Travelling with a damaged passport but scanner can still read it?

Because the passport is still machine-readable, it's likely OK.

But there's always the possibility that you will encounter an aggressive immigration official, who might object because some other part of the passport is obscured. This could include an entry or exit stamp, or a visa stamp or sticker, where the underlying text is difficult or impossible to read.

Your description of the issue as "water marks" suggests the issue is minor, but no one can guarantee it. Attaching a picture of the damage into your question would give us more to work with; use the "Edit" button, then select the "Moon and Mountains" toggle above the composition field. Make sure to obscure all personal information from the image before adding it to your question.