I don't get the problem here.
The school has issued a ruling.
This ruling does not harm your child, it does not cause moral, religious or ethical problems.
Stop being difficult and just go with it?
I don't think it's being difficult. Many, many children just do not like plain water. I know I didn't when I was a child, nor does my daughter. My son drinks water, we give him water, but he also asks for squash. I see no problem with that.
It is much better that the child has a drink of dilute squash than no drink at all. No amount of forcing will make a child like drinking water. That's how kids are. Fruit Shoots etc are a complete other argument...
However - if the rules state nothing but water in the class room, I can well understand that one.