I think that's the stuff I bought from her website. It's not really water soluble in that it doesn't dissolve completely; it just softens up with washing. It is not a fusible either.
I tried it out but don't like it for myself. I am used to freezer paper applique where you glue the seam allowance to the freezer paper (although I use paste instead of glue). The freezer paper gives a harder edge to turn against. I found SS's stuff much more difficult to use, as it is softer and doesn't give the firm edge I am used to with freezer paper. I wanted to try it because you don't have to remove it later; however, I was not satisfied with the results I got from it. It did not come with any identification on it, so I would have to take it to JoAnn's to compare to what they have in order to figure out what it is.
If you want a small piece to try out, PM me and I will mail you a piece in a business size envelope (original poster only, please, as I cannot afford to mail dozens of these out!). If you like it, maybe you could take whatever you don't use to JoAnn's to figure out what it is (and post here so others know).
Edit: Unless I am mis-understanding the original question, no truly water-soluble stabilizer would work with turned-edge applique; it would dissolve when you apply the glue. The truly water-soluble stabilizers are all used for embroidery, to stabilize the fabric so it doesn't pucker and distort while being machine embroidered.