When you walk up to the water source, make sure the water bottle is in your hands, then scroll down with your middle mouse wheel.

To the left hand side of the screen you should get a small text menu with the option to "Fill Water Bottle".

Let us know if this doesn't work for you.

Sometimes you need to be facing it at a very specific angle to get the message that the above pointed out. Mouse over it slowly while crouched until the option appears.

I should ad it did the animation and said "you have filled the bottle" but it didn't I tried two more times but still didn't work.

Was the first water bottle in your inventory full of water? I've only been able to get the first bottle to fill. After that, I need to play inventory tetris, put an empty water bottle first in my inventory, and fill it. This then needs to be repeated for the remaining empty water bottles.

Yes the first one I filled did fill up. And I had all 6-7 in my toolbar. I'll try your solution and thanks.

Cool. Post back with what you find. Even if you are able to fill the water bottles using this work around, it still seems like a bug report is in order. The character should be able to place any water bottle in hand and fill the water bottle which is in hand -- not just the first one in inventory.

Anyway, looking forward to seeing your results.