You may have mixed results depending on what type of nick it is.
If it's a simple dent, then yes, water will raise the wood.
If the fibers are broken, then it may still raise the wood, just not as much.
At first glance, this is about as simple a repair as it gets but there is a little science involved that can work to your advantage if you know how to use it.
Imagine the wood shaft as a bunch of tiny straws all bond together and all running in the same direction. This is where a shaft's moisture resides.
As the wood dries, these straws start to give-up the H2O and along with this, the wood contracts. Expose that same wood to high humidity, for example and these straws will start soaking up the moisture and the wood will expand.
This is basically the reason for sealing a shaft so as to make the wood more stable.
However, if those fibres/straws in your dent are broken, they won't wick or hold H2O as well as the ones that aren't broken.
So, a drop or two of water placed in the dent should raise the wood. It may take a while. If it's not responding to your satisfaction, you can force the moisture into the wood by steaming.
I do this by mounting the shaft in my lathe, supported at both ends with the dent facing up. A small rag, soaked with water is placed over the dent. I use a small electric soldering iron that's hot, to 'roll' over the wet rag that's covering the dent. Steam should be coming off the iron. This steam is also being forced into the wood and will raise it pretty quickly. Don't stay on the dent too long and keep the iron moving as you could easily char the wood. The rag will dry-out quickly at the dent and you'd have the heat of the iron directly on the wood. This method works so well that you can actually raise the grain too much. Sand & seal and you should be done.
If the dent is not coming out with anything short of a come-along, then it can be filled with CA. Sometimes it can be visually noticeable, sometimes not. If done properly, it shouldn't be felt.
Good Luck, hope this helps.