Agreed. It's one thing to be able to only say the truth. It's another of how much it allows you you to withhold the truth, because that's not lying that's just not saying everything.
That's not even the biggest issue. Now, even if you ignore all the big esoteric and wierd things, Vivec was still in some form a god, and even without the heart would have been for some time (although he acknowledges that he has had his immortality removed and would someday die in his dialogue in-game, if i recall correctly). So already, even if a mortal wore it as a test and then found that he or she was incapapble of lying, how does that confirm a god, even a dying one, is subject to the same thing?
And when you throw CHIM, the ability to decide what is real or not at will, into the mix, then how do we know that Vivec didn't decide that the water-mask dosen't compel truth for those moments? Really, there is no way of saying for certain anything about Vivec except for what we already knew and he acknowledged: that in the bare minimum his mortal incarnation, wether or not that is truly different from the god-form, murdered nerevar. The rest is up to us to puzzle out.