We would colloquially say about a composite substance that it is “actually water, not potentially water,” yet it contains within itself both the act of water (the substantial form) and the potency for water (prime matter). The prime matter has not lost the potency for being water by having the form, just as I have not lost the power/potency (potentia) to see when I am actually seeing. When I am not asleep I both potentially see and actually see. When I am asleep I only potentially see.
In book 1 of the Physics, (see chapters 7-9, especially 9) Aristotle is at pains to distinguish matter’s being per se a potential principle from its having per accidens the privation of the form. The matter loses its privation of water-form when it changes into water, but it does not lose its potency to be water. Objective potency always involves a privation, involves not being in some condition. In some cases it is merely a privation, as in the objective potency of the universe to exist “before” God makes it out of nothing. In most cases it is a underlying principle together with a privation.
Aquinas’ statement in the First Way that a thing can’t both be in potency and act at the same time and in the same respect concerns objective potency. Aristotle’s definition of motion (the act of the potential insofar as it is potential) has reference to what Aristotle calls “imperfect potency” as opposed to “perfect potency” (Physics III.2; the distinction is elucidated in the Metaphysics and De Anima). The imperfect potency involved in motion implies privation; that is why it is called imperfect. The power of sight is an example of perfect potency. Hence the context of motion explains Aquinas’ statement. The potency to undergo a change is always an objective potency, because a thing can’t undergo a change to a condition once it is in that condition. But it must retain the subjective potency to be in that condition once it has changed to that condition, otherwise it could not be in that condition. The potency required for motion is a potency joined to a privation.
Prime matter is a subjective potency for substantial forms, and it retains the potency for a certain form when it possesses that form, for it is such a potency essentially, and not accidentally. So too essence is a subjective potency for the act of existence; it retains the potency for that existence when it exists. In Thomism there is a real composition of potency and act.