Actually it is not a symptom of a well tuned engine, as much as it
indicates that the cat is working.

Gasoline, as it burns produces, among other nasty crap, HC=Hydrocarbons, CO, CO2, NOx= oxides of nitrogen and O2

Not water, H2O.

As the HC' are burned, they form CO and CO2, some free H ions remain and these react with the O2 to form H2O.