Why does a lump of cotton wool shrink in water?

The lump of cotton wool has air pockets among gaps of cotton fibres. When water replaces the air from these gaps, the cotton lump becomes heavy and also shrinks due to the removal of air gaps.

[Extra information: 

Air is a mixture of colorless and odorless gases. It is made up of 78 % nitrogen, 21% oxygen, and 1 % other gases and water vapor. It also contains trace amounts of carbon dioxide, neon, helium, methane, krypton, hydrogen, nitrous oxide, xenon, ozone, iodine, carbon monoxide, water vapors, and ammonia.

The percentage of oxygen dissolved in water depends upon various factors like temperature, pressure, and dissolved salts. The percentage of air that can be dissolved in water decreases with temperature and increases with pressure. As pressure increases, dissolved oxygen also increases in water.

The air pockets present in the cotton fibres make it light and easy to wear in summer. When submerged in water, the air in the air pockets are replaced with water due to which the cotton wool shrinks.]