Nitrogen is chemically inert and its density is roughly equal to the density of air, so the extinguishing gas and the air in the room blend perfectly. Thus, the needed concentration for effective extinguishing can be maintained for a long period of time.
Water is chemically neutral. When sprayed, it quickly dissipates a lot of heat, cooling the materials below their combustion temperatures. The smaller the droplets are, the bigger the specific surface of water and the better the evaporation and cooling effects. This reduces damage and prevents heat-related ignition of flammable materials. As it evaporates, the water's volume expands 1640 times, displacing oxygen close to the fire.
Neither nitrogen nor water present any environmental or health hazards - nitrogen constitutes roughly 79% of the atmosphere. They do not harm the ozone layer or contribute to global warming, nor do they create any harmful reaction products when they mix during the extinguishing process. If the fire itself did not create any toxic fumes, you can easily air out the affected area using ventilation systems or opening windows.