In bundled SPC water models, the relative motion of groups of four water molecules is restrained by distance-dependent potentials. Bundled SPC models have been used in hybrid all-atom/coarse-grained (AA/CG) multiscale simulations, since they enable to couple atomistic SPC water with supra-molecular CG water models that effectively represent more than a single water molecule. In the present work, we systematically validated and critically tested bundled SPC water models as solvent for biomolecular simulations. To that aim, we investigated both thermodynamic and structural properties of various biomolecular systems through molecular dynamics (MD) simulations. Potentials of mean force of dimerization of pairs of amino acid side chains as well as hydration free energies of single side chains obtained with bundled SPC and standard (unrestrained) SPC water agree closely with each other and with experimental data. Decomposition of the hydration free energies into enthalpic and entropic contributions reveals that in bundled SPC, this favorable agreement of the free energies is due to a larger degree of error compensation between hydration enthalpy and entropy. The Ramachandran maps of Ala3, Ala5, and Ala7 peptides are similar in bundled and unrestrained SPC, whereas for the (GS)2 peptide, bundled water leads to a slight overpopulation of extended conformations. Analysis of the end-to-end distance autocorrelation times of the Ala5 and (GS)2 peptides shows that sampling in more viscous bundled SPC water is about two times slower. Pronounced differences between the water models were found for the structure of a coiled-coil dimer, which is instable in bundled SPC but not in standard SPC. In addition, the hydration of the active site of the serine protease α-chymotrypsin depends on the water model. Bundled SPC leads to an increased hydration of the active site region, more hydrogen bonds between water and catalytic triad residues, and a significantly slower exchange of water molecules between the active site and the bulk. Our results form a basis for assessing the accuracy that can be expected from bundled SPC water models. At the same time, this study also highlights the importance of evaluating beforehand the effects of water bundling on the biomolecular system of interest for a particular multiscale simulation application.