I found this post but it was using moss as defense against slugs:
https://permies.com/t/56307/moss-mulch
No reply to there, but I was thinking this otherwise, that you could use it as mulch.
It will use some of the water, but also I think it will be good that the soil breathes: so it will let the air exchange also under the moss.
But also, it will help to keep the moisture longer as moss is like a sponge, so when it rains it will also release the water to the ground a little bit when it gets dryer.
Also I think it would improve the microbes activity in soil and provide good place for bugs to live.
Has anyone cultivated live moss with plants, using it as mulch?
I am planning to do hugelkulture beds this spring, and was thinking that when the moss grows a blanket on the bed, it will help to make the soil more steady in case of heavy rain.
Also I think they are good biological filter, so the pollution from rainwater would not go directly to the soil, but has to first pass through the moss-layer.
Some links:
"Mosses obtain all their nutrients from the air rather than the soil, which is why it is able to grow on rocks!"
http://www.thegardenhelper.com/mosscare.html
More on permies:
https://permies.com/t/13614/sculpture/art/Moss-art
https://permies.com/t/12289/Spanish-Moss-Tea-good-fertilizer
https://permies.com/t/33/Moss-propagation