Yes, that was the way they did it at Sublette. Being Sublette was a very flat spot to perform this, it would work without much problem - especially if everyone was cut in a what was going on.
The real danger is on very heavy grades. With a heavy train on a heavy grade, nailing the water spot is much tougher, and starting and stopping is inviting a pulled drawbar.
I must admit, we never split the trains up when we stopped for water, even at Cresco. We took great pride in being able to stop a mid-train helper dead on the spot for water. We did as you said, had the helper engine take over the air of the train to make his spot.