I'm an architect and my firm routinely specifies interior finishes for projects so I thought I'd contribute a professional's perspective on the issue of how many coats of paint are deemed "acceptable". The fact of the matter is the average consumer usually isn't a paint expert and can't be expected to know about all the factors that impact coverage. That knowledge is considered "means and methods" and in a court of law, the responsibility lies with the painter or general contractor, not the consumer. What the consumer should be concerned about is the final result-does it look good and is it what you expected? The simplest way to communicate this to your painter is to stipule in your written agreement that the number of coats will be "as required to cover". That way all the guess work about what kind of primer, how many coats, how color affects the scope of work, etc., is removed from the consumer's responsibility and resides where it belongs-with the professional. In the contract that's why retention is always a good idea-typically 10% is withheld from payment until the job is completed to the satisfaction of the customer. Of course in return you as the customer have to be reasonable about what constitutes a completed job. Just my $.02.
With that said, here's the reality of that particular scenario. Painters do put water in the paint, but not for reasons you would think. Some materials need to have their viscosity manipulated in order to slow drying time, allowing gravity to 'smooth' out the product for a better finish. It also prevents 'drags' and 'sausages'. I personally try not to do it too often, but from time to time I have to. I want my client to have a proper finish.
Oh, where to begin? Let me start with 'watered down paint'. 25-50% before the material gets to the site? Impossible. You would basically be painting with water at that point. It would be less of a hassle, and cost, to simply use proper material. You would be forced to apply three coats instead of two, as the coverage would be horrible. Whatever cost you think might be saved in materials would be lost in labor. House Painting Arvada Colorado