Boron nitride nanotubes (BNNTs) have been reported to possess superior water permeation properties. In this work, using molecular dynamics simulations with partial charges, capturing BNNT polarization effects obtained from quantum calculations, we found that Stone-Wales (SW) defects in a (5,5) BNNT result in phase transition of water, i.e., a transition between liquid-like phase and vapor-like phase was observed. The 90 degrees rotation of the B-N bond, SW transformation, in an SW-defective (5,5) BNNT results in breaking of hydrogen bonding with neighboring water molecules and leads to the existence of a vapor-like phase near the SW defect. Water transport rate was evaluated by measuring translocation time. Water in an SW-defective (5,5) BNNT has fewer translocation events, longer translocation time, and a higher axial diffusion coefficient compared to water in a nondefective (5,5) BNNT.