Most of the time Poly / Cotton thread is used, so you are also making the cotton component of the thread swell to fill the hole where the needle has pushed through the fabric.
The needle of course is bigger than the thread, as the thread passes through the needle.
There are very few 100% cotton canvases. Swag canvas is one.
The poly is the fabric dimensional stability and strength. It also last better in the weather than cotton.
Cotton gives the flexibility and a little stretch. Most canvas is 50 / 50 or very close to.
If you have a feel of striped annex walling, it feels stiffer than a plain roofing canvas as most walling is 100% poly.
So as others have said, by wetting your new canvas you are getting the canvas and thread (in most cases) to expand and fill the gap between the canvas & thread.
The humidity can be enough to stop leaks from new. I have had very few new annexes or campers leak in 25 years of making canvas stuff.
The worst I ever had was my own camper, it was like a sieve for the first few trips away.
I am personally not a huge fan of the poly cotton canvas used on campers these days. There are far stronger and lighter fabrics available.
These fabrics also pack much smaller. But like everything in life (and camping) its a compromise.