Quoting TheNuge:" oh man! i remember that phase. it was short as I made sure she knew it was NOT acceptable. i think ... [snip!] ... it again at about 2 1/2 but that was it. If you scold her a bit or take it away and say "no spitting" she should understand."
I have been taking it away from her when she starts doing it. It's been hard though because when she starts acting like she's thirsty I'll get her something to drink and she'll be fine at first, then not more than a minute or two later I hear her gargling it and then she spits it out all over herself.
I'll keep trying to make sure she knows it's not acceptable, and I'm just going to give her water in the afternoon for now, it's less of a mess to deal with.
Hopefully she'll get over this phase soon. She's hasn't done it in public, but I fear the possibility of it xO