http://diving.isport.com/diving-guid...m-while-diving
All to do with body temperature - water conducts away heat and muscles should not stiffen with cold between dives. Same reason for the adjacent warm-tub immersion.
The little towel is a shammy - synthetic material now but the word comes from the skin of the Chamois (my chamois leather is good for drying off the car to a smear-free finish after washing)