Yes, water weight can be expected to go up and down regularly by several pounds - even more for some people. If your husband lost 20 pounds in a month, likely a lot of that was excess water. And getting rid of that water is a GOOD thing! But... water retention is a funny thing, and it varies depending on water intake, temperature, what/how much you're eating, salt intake, stress levels, etc. etc.
Plus... when you first make a major dietary change and lose a lot of weight, your body tends to throw off a lot of water. This happens on almost any diet, from McDougall to low calorie to low carb. As it gets used to the new regime, things equilibrate and often it will return to a bit higher "water balance" and you may see a few pounds of water return, while at the same time you may still be losing fat. It can be hard to distinguish between water loss/gain and fat loss/gain. Fat comes off and on more slowly, however, and changes can easily be masked by ups and downs in water retention. So... your husband should not be discouraged. He probably did not regain any fat at all, but is just seeing a normal shift in water retention.