Steel braided lines are for better feel and pressure. They don't flex like OEM rubber.
1) If the levers do not allow the piston in the MC to return all the way to it's designed return position it will not uncover the port that allows for free flow to the reservior and relaxation of the caliper and system.
2) If there is excessive water in the system it will turn to steam and create pressure in the system. The hydraulic fluid will expand a little bit but nothing like the water turning to steam. All brake systems have a little water. Condensation from the reservior, which is open to the atmosphere, is inevitable. That said it can be mitigated by use of high quality fluid and regular bleeding from the bottom of the system where the water collects since it's heavier than the brake fluid. When was the last time you bled the brakes from the caliper?
3) As stated here a full resevior could do this. People call this "hydro-locking" and it's aptly named. A hydraulic lockup of the system that is designed to operate with an air cushion or open to atmoshere and has no vent or room for air compression.
My bet is number 1 and 2. Let us know how it goes and be safe while you troubleshoot!