The old design for jacketed bearing housings had a cast in jacket that completely surrounded the bearing. The heat is being generated by the bearing. So, the bearing attempts to grow. The outer housing is cooled and attempts to shrink. Since a standard ball bearing has very little internal clearance, it doesn't take much to greatly increase the ball loading. And a heavily loaded ball generates more heat. Heinz Block first documented this phenomenon. They did testing on real pumps in a refinery installation and proved that the bearings ran cooler after the cooling water was eliminated. Please keep in mind that this only refers to jackets that completely surround the bearing. Newer pump may have cavities in the bottom of the housing that are cooling the oil. Others may have cooling coils or removable cast coolers in the bottom of the housing that cool the oil. If the oil is being cooled, this problem does not occur and the cooling can be beneficial.
Another problem with jacketed cooling can be condensation. In very wet environments, the top of the housing on a pump that is not running may cool down below the dew point of the surrounding air and condense moisture in the oil. This would be most likely in someplace with high humidity.
Johnny Pellin