This is simply ignorance of the new system.
you need to drink and eat until you get a notification like "you are feeling full."
When you spawn, you are incredibly low on health (ie, very thirsty and hungry).
Therefore, you will quickly begin seeing "I am thirsty" notification. When you drink, you only recover from critically low health, but your stomach still isn't full.
Liken this to a car that's near empty on gas. You can put a gallon of gasoline in it, and that puts it right above E, but it doesn't fill the tank, and eventually the car will approach empty again.
This is why you see constant status updates, because you are hovering around critically low health. you may drink to stop the notifications, but you do not fill your stomach.

Yes, But when you consume a Canteen, and a bottle of water, as shown in the image provided, I think it's a bit ridiculous that I'm still at "yellow" thirst.

You did open the image right? I'll blame myself for not mentioning that in the text, to be fair.

Something I also want to add on, is that in the same playing session, I died, and re-spawned, The Thirst still hadn't reset, and soon after that I began seeing the effects of dehydration.

(Mind you, the image shown, both of those canteen swigs drank, and the screenshot taken was within 30 seconds. This image was a test, not a random occurrence that I just took a screenshot of when I drank 100ml of water and expected to be 100% hydrated.)

Whenever I eat, the hunger notification disappears, However, Thirst does not.
The notifications I mean, are in the inventory, not in the bottom left corner.

But yes, I understand what you mean with the analogy and such, and was aware of the systems' intentions while I was writing the first post.

After further testing with drinking, plasticcactus, you are right. But would you disagree with the amount you have to drink in order to be not thirsty being a bit ridiculous? took me roughly 10-15 drinks from a lake consecutively to quench my thirst completely.

Absolutely, however, the foundation is laid. It isn't a broken system, but it just requires some tweaks. I'm grateful for the new notifications that inform you when you are hungry, thirsty, healthy, etc

When you drink from a bottle you drink 2dl, also when you drink from the pond you presumably use your hand which gives you even less water each time.
A little water at a time has two perks against a system where you drink once and get full from thisty.
1: It's more realistic both in how people actually drink and how much time it takes.
2: It allows / requires you to drink regularly and take small fast swigs during breaks or downtime keeping your thirst at bay instead of you always having to wait to get thirsty to drink not to use water unnecessarily.

It is to my understanding that it was implemented this way, however the amount of water that you need to drink considering how much daily intake should be, while under stress of being active / sweating and such, is a little bit large, it has probably been set that way on purpose. Nothing more to add to this issue report.