3 - Types of Water Spots - Type I, Type II and Type III
Type III Water Spots
Type III Water Spots are spots that look faded or dull and are found primarily found on
single stage paints after a water source lands on and then pools on the paint and is usually left to dwell on the surface for some measure of time before it evaporates or is wiped-off the surface.
Modern clear coat paints tend to be harder and impermeable, that is non-porous, so liquids don't penetrated easily and thus stain spots tend to be topical, that is only affect the very upper surface and are easier and safer to remove with a compound or polish.
Older single stage paints tend to be soft and permeable, or porous, it's common for liquids to penetrate into the paint and stain the paint below the surface. Removing stains out of single stage paints can be risky because in order to remove the stains you have to abrade the paint and if the stains penetrated deep then you risk removing too much in an effort to try to remove them completely.