It was explained to me once that latex paint is just liquid plastic. That's why it is waterproof once it is dry. Since it is water based, it can be thinned and cleaned with water, but once it is dry, it is like a thin sheet of plastic. It's a good thing it can't be reconstituted; otherwise it wouldn't repel water when painted on the outside of our houses!
It's actually an emulsion of polymer (plastic) particles and pigment particles softened with solvents and suspended in water. Water is just the carrier.
Typically it is barely suspended, once some water evaporates the particles touch and start to fuse. The applied paint looks and feels dry to the touch. However, it can take a month for it to fully fuse and all the solvents evaporate to achieve its maximum hardness and durability.
Once it's hard, there is no reasonable method for the home user to rejuvenate it. You can throw away the hard parts, but that's all. Even on the industrial recycling scale hardened skins are typically skimmed or filtered out.