For the Breathing Reed to take effect, it must be held, i.e. selected in the hotbar or being attached to the cursor. When held, the reed appears above the player and the rate at which their breath meter depletes as well as the rate at which they lose health while drowning is halved. The reed's tip does not need to be above the surface of the water for this to take effect. Additionally, the breath meter refills as soon as the tip of the reed is outside of water, but not within a block.
Holding the Breathing Reed prolongs the underwater breath to 46.67seconds or, if paired with diving equipment, to 3minutes and 6.67seconds. In addition, the rate at which health is lost while drowning is reduced to 1/2 or 1/8, respectively.
Though the Breathing Reed can have modifiers that change its size, it does not affect its functionality as a tool.
Holding it while having a fish bowl in the armor slot will prevent the player from drowning.