<p>This study investigates the performance degradation of abrasive waterjet (AWJ) systems under submerged conditions, with a particular focus on the influence of standoff distance (SOD) during hard rock excavation. Controlled drilling experiments were conducted on granite under both air and submerged conditions, with systematic variation of water pressure, exposure time, and SOD. The results showed that removal depth was highly sensitive to both SOD and environmental conditions. Under air conditions, increasing SOD led to only a minor decrease in removal depth. In contrast, under submerged conditions, removal depth dropped sharply with increasing SOD because of rapid jet attenuation caused by water interaction. To quantitatively assess performance loss, this study introduced a depth-based loss rate and a loss rate per unit SOD (LR_S). Analysis of LR_S revealed two distinct degradation phases: Phase I, marked by a sharp increase in performance loss owing to the abrupt collapse of the jet’s core zone, and Phase II, characterized by gradual jet attenuation accompanied by sustained low removal efficiency. Although hydrodynamic resistance increases linearly with SOD in Phase II, the observed decline in LR_S suggests that the majority of performance degradation is concentrated in Phase I. Core zone collapse was therefore identified as the primary mechanism responsible for performance loss under submerged conditions. To support practical application, threshold SODs corresponding to 30%, 50%, and 80% performance loss were defined and empirically modeled as functions of water pressure. These relationships provide guidance for selecting optimal SOD enabling more efficient AWJ operation in submerged environments.</p>