When high humid air flows past ac coils it can create a vapor mist sometime. Most of the time the the humidity collects on the AC coils and then it drops into a disposal tank below. Once the car stops it drains onto the street.

The AC works as a great dehumidifier. In the winter if your windows are all fogged up run the ac on with the heater with the vents closed. It will clear it up your foggy windows very quickly. Once it clears up stop the engine so the water will drain. Then turn it back on. If you don’t do this the water may sit in the disposal tank and the moment you turn the ac off while running the heater, the heater will warm up that excess water and put the humidity back in the car. If you are driving then just leave the ac on the whole time.

Note: you can’t do this in defrost mode. Toyota won’t allow you to close the air vents in defrost. In the winter time Toyota thinks the outside air is dryer which is generally and by keeping the vent open it will eventually push the humidity out which usually works. This will also help defog your car windows but it takes longer. The problem is on warm rainy days when the humidity is high. Trying to use the defroster to clear the humidity off your windshield doesn’t work well because the vents won’t close.