It won't if the person is careful not to spray water under the headlights. The water confuses the fi sensor somewhere there. However when ridden for a few kms, the water vapourises and the light stops blinking. So no issues there
and regarding "The specification of the engine oil to be used is SAE 20W50 API SG/SL JASO MA,MA1."
Jaso MA2 is good too obviously as it exceeds these two specifications. THe oil I use(Motul 3100 4T 'technosynthese' 20W50) is JASO MA2, which incidentally is better for wet clutch usage(bikes).
check this link.
'technosynthese' is Motul copyright for SS I think
New JASO oil standards (MA1, MA2) - KatRiders.com
And regarding "The recommended brake fluid specification on the owners manual is DOT4 or DOT 5.1"
Dot 5.1 will be readily available once the N650 hits KTM showrooms. So owners can wait till then.