Option 1 -> This is a literal misinterpretation of "water" in the phrase - incorrect.
Option 2 -> This refers to drowning/burial at sea, taking "water" literally - incorrect.
Option 3 -> This is the correct idiomatic meaning of the phrase - experiencing a decisive or final defeat.
Option 4 -> This interprets "meet" literally as a meeting/appointment - incorrect.
Hence, Option 3: To experience a decisive or final defeat -> The idiom originates from Napoleon Bonaparte's final and decisive defeat at the Battle of Waterloo in 1815, which ended his rule as French Emperor. When someone "meets their Waterloo," they face an ultimate defeat or insurmountable obstacle that ends their success -> correct