Your question doesn't make sense. Why would water finding its own level have any effect on the shape of the earth? The human body is between 55 and 78% water, so presumably you think people should be flat as well?
It's rather like asking why water in a tumbler does not make the tumbler flat.
The water finds its own level around the shape of the earth (which is indisputably - almost- round). It does not alter the shape of the earth (except slightly here and there by means of erosion).
Your question does not make sense. All large areas of water have a curved surface. The water level is always at right angles to the Earth's gravitational field lines. This observation supports the fact that the Earth is spherical (or at least an oblate spheroid)
If the earth was falt then gravity would just make the water flow to the under side of it.
But as the world isn't flat and never has been this question is a bit silly.
Apparently not even in the middle ages did any one think it was flat.
They thought the sun orbited us but thats about all.
Earth hold the water and not otherwise. 75% earth surface is covered by water. It is true that water fill the deeper cracks, low lying areas and crevices, we live on the upper levels or raised areas of the earth. Earth exist because of its round shape like boll
Gravity tries to pull everything to the center of the earth. As the earth is a sphere, this results in all the water being spread evenly over the solid (mean level) surface. However, because of the gravitational pull of the Moon and to some extent the Sun, tides result in the level slightly changing from being uniformly even over the globe.