What term describes what sugar and H2O molecules are doing

Hydrolysis.

Explanation:

Hydrolysis is a type of chemical reaction in which a molecule of water breaks down into one or more chemical bonds.

The term is used broadly for these reactions: substitution, elimination, and fragmentation reactions in which water is the nucleophile.

Biological hydrolysis is the division of biomolecules where a water molecule is consumed to effect the separation of a larger molecule into small parts. When a carbohydrate is broken down into its component sugar molecules by hydrolysis process, that is called saccharification.

After breaking down by hydrolysis process, carbohydrates produce small particles or molecules. As an example, by the hydrolysis process, sucrose produces glucose and fructose.