In a boiling setting, the full water immersion rinses away the structural pectin and starches, causing the waterlogged texture.
Serious Eats has a good explanation of potato pectin and starches.
An older research paper on pectin and potato texture - full text behind paywall.
In a steaming situation with potatoes raised above the cooking liquid, without the large amount of liquid water in contact with and penetrating the potatoes the starch gelatinization is limited to water already present within the cells and condensation on outer surfaces of potato pieces. The gelatinized starch tends to stay contained within the pieces as well since the pectin structure is not washed away by mechanical agitation and exposure to cooking liquid. The potatoes still release cellular fluid during cooking, and that collects at the bottom.
From personal experience pressure cooking only potatoes in my Instant Pot, yellow-fleshed potatoes such as Yukon Gold remain creamy throughout and Russets become a dry fluffy when cooked up to 50 minutes on high pressure with a natural release.
Given a long enough cooking time the potatoes would expel all the available internal liquid - waxier potatoes become gummy and starchier potatoes become powdery. After that, pectin and starches break down and turn to mush, though that would be on the scale of hours.