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Feta is a brined cheese, it's soaked in a salty brine and will store well in the brine. You don't need to soak it in water unless you think the feta is too salty. You can dump the brine and soak the hunk of cheese in milk or water. That will help draw out some of the salt.
The choice is definately related to taste, purpose and culture.
I learned about soaking feta from my persian friends who enjoy this as part of a platter of herbs, which they would refer to as 'vegetables' - parsley, cilantro, green onion, mint, basil - between pieces of pita or lavash. I have not encountered greek food asking for soaked feta - though better greek cooking also includes feta that hasn't been in long-standing brine but is typically a little fresher, so maybe they are changing out the bring or also giving it a mild rinse.
I find that I prefer feta like this when I'm eating feta straight. If my recipe calls for feta and salt, a little salty feta is nice. Personally, I always soak my feta and change the water regularly since the brine is gone, which adds a preservation element. After doing this for more than 10 years, I find that I no longer enjoy unrinsed feta as much. I've not thought about using milk to soak it, sounds good, but I just use plain fresh water.
The taste is very mild and creamy when soaked - the longer it's soaked, the less salty. You can soak it long enough - I find overnight sufficient - to remove the saltiness and create a mild creaminess I enjoy a great deal.