As OP has already established, there's a phrasal verb to water down (literally and figuratively, to dilute). But that's not relevant to the cited usage here, where it simply means to [make] wet. Per my comment, this is clear from the context, which explicitly says that the roads were dampened to reduce the dust.
OP is correct in supposing that down in this instance simply refers to the fact that the water is splashed down[wards] onto the road. But I think it's fair to say the semantic content of the word is negligible here, since the meaning should be just as clear even if it's omitted.
Taking a different verb, it can be seen that [optional] prepositions are often added after common verbs of action where the [minimal] semantic content of the preposition can be largely ignored...
He ate his tea in a hurry, brushed up his jacket, and started off.
The man lifted himself off of the ground, brushed off his jacket and walked away.
He stood before the mirror while his valet brushed out his jacket.
In those examples, native speakers would be unlikely to register any difference in meaning if those prepositions were transposed - or more importantly, if they were omitted altogether.
In my examples, to brush up can sometimes be a "phrasal verb" (to review; refresh one's memory) - but that clearly doesn't fit the context, so it can be discounted.
My advice in such contexts is to consider the possibility of a phrasal verb usage, but if that doesn't quickly suggest a credible interpretation, assume the preposition isn't particularly significant. Often it'll be an almost random choice (but don't add such prepositions yourself unless you're familiar with the usage).
To say that "everything comes back to X" in this sort of context means that all the questions, discussions, decisions, definitions, or whatever activity it is that you're involved in depend finally on X.
It is impossible to tell from this brief passage what exactly the author means by self. Just what the self is has been more or less the central question of Western ethics, psychology and art since the Romantic Revolution, and the term has dribbled down into pop philosophizing without any very clear definition. I think about as far as you can take the term-in-general is to say that the self is a name for the individual's attribution to himself of a unique personal identity. But whether or in what sense the self is a real entity is disputed.
Best Answer
I haven´t found an specific dictionary entry for self-spoken but
According to Cambridge Dictionary
self- [PREFFIX]
-spoken [SUFFIX]
And according to MacMillan
self
Adding all these evidences with the other characteristics you listed, we can infer that he's a person that is always talking about himself.
EDITED: I'm not a native English speaker, it has been pointed that "self-spoken" is not a recognizable word. Maybe the author of the entry meant self-centred or any of its synonyms.