[RedDevil]

Umm. The difference between distilled and tap water is the mineral content and gases in the latter.
These are mere fractions.
Yes, they will form a deposit in the system, but you'd never notice.
Once the water has shed its fractional deposit, it is free of it and can deposit no more.
Same for the oxygen in the water. Something will rust and use up all the oxygen, stopping further oxidation.
You wouldn't fill the closed loop of your CV system with distilled water, would you?

In a system where you continuously have to heat and refill like a steam iron there you should use distilled water, otherwise you'd chalk up the boiler inside it or get the occasional chalk squirts on your clothes.
(me mom told me so before there was an interweb!)

Enter the poor soul replenishing his leaky radiator every day from the tap. Inevitably over time deposits do build up and the system fails.
If his manual says it is OK to use tap water he sues the manufacturer, so it does not.
If he diligently refills it with distilled water he can continue doing so until the cam belt breaks or he runs out of oil, or whatever. It won't be the radiator clogging.

Somehow the wisdom of using distilled water in water replenishing systems boiled over to non replenishing systems.
Mix in some OEM liability and "better safe than sorry" and you have an urban legend.

XYZ is right.
You can fill your radiator with a mix of antifreeze and tap water (but not every day ).