Normally, a rocket will have higher Isp if fuel is present in somewhat higher amounts than is needed to react with all the oxidizer. This is true in H2/O2 engines as well as hydrocarbon/O2 engines. This is because otherwise the combustion temperature is so high that some dissociation occurs, which robs some heat. Adding extra fuel makes it cooler so combustion is more complete, but also reduces the average molecular weight of the gas, for a net increase in Isp.
Here, I'd worry the combustion temperature would be too high. They might avoid problems by operating at very low chamber pressure, but that makes dissociation even more of a problem.
One might ask why not just heat the water directly. The problem there is that at reasonable temperature for a heater making steam, Isp is be very low. You'd be lucky to get much above 200 seconds, less than half the Isp of a H2/O2 rocket. Ammonia or methanol are better choices that that situation (they can decompose to hydrogen-rich gas, improving Isp at a given temperature).