A sponge half full of water can take on board just as much again. And so on, and so on. If you pick up the saturated sponge and squeeze it, water drips out. If you dip it in a bucket of water, keeping it squeezed, it doesn't absorb any water out of the bucket. We've demonstrated that by compressing the sponge we have reduced its ability to hold water.
Air acts in the same way.
Compressed air can't hold as much water vapour as atmospheric air of the same temperature. Hot air also has the ability to hold more water than cold air. Its a little bit like dissolving salt in water. You can only dissolve just so much salt into a pint of cold water, but you can dissolve a lot more salt into boiling water. However, when the boiling water finally cools down, the dissolved salt will come out of solution and crystallise.