Earlier quoted context omitted.
I didn't realize that air compression hardware has to deal with water removal but apparently it does. One article I found is suggesting that air at 7 bar can hold about 1/3 as much water. What confused me is that the a wing stall (low pressure above a wing) causes cloud formation, due to vapor condensing out of the air. But 7 bar is ~7 times as much air per cubic centimeter, so that's 14% as much space containing 33%…
When you compress air, the moisture falls out, the amount that falls out depends on pressure and temperature. pretty much all normal compressors simply have a, I don't know the right english word, but.. a valve at the bottom and once in a while (like, once a year or less, depending how much you use it) you take the pressure mostly off the compressor and open this, then the water is blown out.
Its also not just water that is collected at the bottom of the air tank, compressor oil also collects. Oil can also be deliberately added by either as a byproduct of compressor design or from separate equipment, into the airstream help lubricate and protect equipment from the moisture, reducing the need to remove the moisture through other means.