Note that I am no mechanic, and I do not recall specifically the lead-up to that scene in the film, but I do know that there is such a thing as "water injection" which is really methanol+water injection (or humorously "meth injection").
I think the idea is that the methanol is higher octane (or rather increases the fuel octane, slowing detonation) and the water plays some role in cooling the fuel-air mixture enough to prevent premature detonation, which leads to some minor efficiency boost.
I think that these systems are banned in racing sometimes, probably because if they fail to cool things down properly, and the engine is tuned up to work tightly with them (for racing/max performance), then you get what some folks describe as an "engine grenade."
Presumably the vehicles are (at least fictionally) using the hood scoop to grab cool air and funnel it into the carburetor, and so they are doing the equivalent of wiping the sweat off the brow of the surgeon in a melodrama.
Beyond that, I don't know if the specifics of what they are doing adds up (there are several places in the engine chain to inject the water), nor do I think they tell us what the fluid is. 160-proof Methanol or ethenol would still be distasteful, but probably more pallatable than gasoline.
further reading here (4. Pre Throttle Body/Carburetor Injection) and here