Would spending a day in the hustle and bustle of a busy city like Waterdeep deal psychic damage? I know that when I come home after a rough day of traffic, meetings, etc, I need to take a short rest to recover hit points.
It would depend on whether or not you've grown up in Waterdeep, and are in your "home" ward/familiar streets. Country folk coming to the Deep for the first few times: definitely damaging.

— Ed Greenwood (@TheEdVerse) September 5, 2018

Yep, that's apt immersive roleplaying. :} I think you've described what Waterdeep seems like to outlanders PERFECTLY–unless they came from Baldur's Gate or another BIG city.

— Ed Greenwood (@TheEdVerse) September 5, 2018