I believe using this should be simple, you just need to connect to Arduino interrupt pin 2, and can measure the number of PWM pulse/interrupt per unit of time. The water flow would be directly proportional to the number of measured pulses.
Red wire is +5V
Black wire is GND
White wire is PWM signal output
Lowest rated working voltage: DC4.5 5V-24V
Maximum operating current: 15 mA (DC: 5V)
Working voltage range: DC 5~18V
Load capacity: ? 10 mA (DC 5V)
Temperature: ? 80 ?
Operating humidity range: 35%~90%RH (no frost)
Allowed pressure: pressure 1.75Mpa
Temperature: -25~+80 °C
External threads: 1/2″