Water-resistant plywood is suitable for areas lying in high humidity, like bathrooms and kitchens. It is also called Boiling Water Resistant (BWR) ply. Most types of wood eventually gets damaged in case of a prolonged exposure to water. However a good quality waterproof plywood is built in such a way that it offers a better degree of resistance to water, compared to natural solid wood or commercial MR grade plywood. The reason for this is that a phenolic resin (which is a synthetic plastic resin) is used for glueing all the individual plies together. Use of a such a synthetic plastic resin helps in making the plywood waterproof.
The thumb rule is Marine plywood is better than waterproof BWR plywood, and BWR is better than commercial MR plywood. Given this basic equation, which type of plywood we as customers should choose, depends on our inclination and spending capacity. My view is that for furniture that is likely to get exposed to a bit of water, for example kitchen cabinets or other kitchen furniture, using waterproof plywood (BWR) is a good choice. For other furniture which is likely to remain dry (e.g. drawing room, bedroom furniture, partitions, wall panels etc.) using commercial MR grade plywood is usually good enough. Another thing to consider is that in most cases, all plywood used in home furniture and decor will be laminated, and the laminate surface covering helps in preventing water from reaching the plywood core, increasing the overall water resistance of the finished material.