What happens will depend on whether it is a waterproof flashlight.

Most sources of water are electric conductors, containing enough dissolved salts (even tap water) to conduct electricity. As a result, any electrical appliance, including a flashlight, can be shorted out if put in water.

Being in water when an appliance falls into that water and shorts out can be dangerous: blood is a better conductor even than tap water, and the electric current can use our bodies to conduct through. The electronics in a flashlight, however, is surrounded by a casing, which is not connected to the wiring. Even if the circuits are still dangerous, the casing is not, and it would be safe to pick up. If the casing is water-tight, then water cannot get inside the flashlight where the circuits are. Not only will it be safe to pick up, but it will still work.