In a diesel, covering the exhaust with water does not stall the engine. If you stall for another reason with the exhaust covered, then you might have a problem with water being sucked back up the exhaust and into the engine (or catalytic converter if you have one).

A diesel can run completely submerged as long as the air intake is above water level, and any electronics are properly sealed... ask anyone who has a Land Rover with a snorkel who goes 'wading'... If these numpties had slowed down they wouldn't have got water in the air intake, and they might have made it to the doughnut shop on time and without getting wet...