It cools the atmosphere by absorbing some heat — heat flows from warmer to cooler — and by increased cloud cover that changes the energy budget of the planet. (watertechbyrie.com)
The former are caused by faster water loss and higher cloud bottoms with warming and the latter by increased cloud water density with warming. (realclimate.org)
The increased water vapor will almost certainly result in increased cloud formation, thereby, increasing the albedo — negative feedback. (realclimate.org)