The watery sphere spell description says:

You conjure up a sphere of water with a 5-foot radius at a point you can see within range. [...]

Any creature in the sphere’s space must make a Strength saving throw. On a successful save, a creature is ejected from that space to the nearest unoccupied space of the creature’s choice outside the sphere. [...] On a failed save, a creature is restrained by the sphere and is engulfed by the water. [...]

Does that mean the creature starts to suffocate?

The water created seems to have the properties of normal water:

When the spell ends, the sphere falls to the ground and extinguishes all normal flames within 30 feet.

I know that "spells only do what they say they do", but since it can be derived by physics that fire spells emit heat, then watery sphere should also prevent breathing. Using similar reasoning, there's no effect that allows the creature to breathe inside the water.

I'm a little concerned when I think that the watery sphere and hold person combo can kill a single powerful creature with ease; it doesn't seem right.

Theoretically Yes, but only works for negative con mod

Though it doesn't explicitly state it I would consider "engulfed by water" to be equivalent to being underwater. Thus triggering the suffocating rules.

Suffocating:
A creature can hold its breath for a number of minutes equal to 1 + its Constitution modifier (minimum of 30 seconds).

However for most creatures the duration of watery sphere won't be enough to cause them to drown, even if they fail every saving through. Due to the duration of the spell.

Watery Sphere: Duration: 1 minute

Constitution below 10

Even for a creature with a negative constitution they would have to fail a minimum of 6 consecutive rolls before drowning. Assuming they have the worst stats in the world they will still succeed at least 30% of the time. (Probability of a Natural 20 from 6 attempts). Technically a natural 20 is not an auto-success on saving-throws but most tables I have played at accept it as a house-rule. So if you have a high saved DC (>20) or the target has a negative modifier in strength you may have a chance to succeed.

Constitution of 10 or above

Any creature with a constitution of 10 or above will never suffocate as they can hold their breath for longer than the spells duration. Though forcing them to hold their breathe can prevent them from casting spells or communicating which is fun.

Interaction with Hold Person

You mention that the combination of Hold Person and watery sphere could be quite strong. This would come from the effect of hold person.

Hold Person: ... The target must succeed on a Wisdom saving throw or be paralyzed for the duration. ...

The paralysed condition states

Paralyzed: The creature automatically fails Strength and Dexterity saving throws. Attack rolls against the creature have advantage.

This would mean casting Watery Sphere on a target already held by Hold Person would automatically succeed. The extra save does increase your chances of the target reaching 7 rounds without saving. However, the chance of a creature having negative modifiers for Strength, Constitution and Wisdom is extremely low and it is likely that they will easily succeed at least one of these saves.

The creature does not suffocate, unless it has a negative CON bonus.

Suffocate:

Holding your breath is 1 min + con modifier (minimum 30 seconds). When a creature runs out of breath or is choking, it can survive for a number of rounds equal to its Constitution modifier (minimum of 1 round). At the start of its next turn, it drops to 0 hit points and is dying, and it can't regain hit points or be stabilized until it can breathe again. dndbeyond

Watery Sphere:

Duration: 1 minute. dndbeyond

Thus, unless the creature has a negative Con bonus (Con lower than 10), it can hold it's breath longer than the sphere lasts.

Note: It is up to DM discretion if "restrained and engulfed" includes covering the head.

Spell doesn't describe the environment in the sphere, a creature holding breath is in minutes per con modifier.

It also doesn't state "drown" or "suffocate".

Does state engulf, but does not include a hollow or complete liquid sphere description.

Doesn't state "can breath there" like Otulike's Resilient Sphere

Can repeat saving throw and cancel the effect.

Suffocating

Holding your breath is 1 min + con modifier (minimum 30 seconds)

Spell only lasts up to 1 minute.

Albeit limited or low chance of success, this is what casting watery sphere would look like if the target failed their saving throws and had at least a 9 or low in Constitution for a negative ability modifier.

• Round 1 to 5 - Hold breath


• Round 6 - Starts to suffocate on 6th round


• Round 7 - Drops to 0 hp and is dying

At least this site gives me great ideas.