The knowledge that alcohol has an adverse effect on fetuses didn't come to light, or at least wasn't widely known until relatively recently, as such very few sources exist documenting babies born with defects or health problems attributable to alcohol abuse. We know childbirth was extremely fraught during the Middle Ages, and many children died in infancy. Any issues brought on by alcohol would likely have been misattributed as a common childhood illness or defect.
That being said, there's two issues that need to be addressed in this question. Firstly, many people did drink water everyday. Rural peasants and the poor would drink water simply because outside of the cities, water seemed to be perfectly fine. Wine was often a reserve of the aristocrats and merchant classes and beer, though cheap and plentiful, was usually imbibed by men, even then they didn't exactly drink gallons a day.
The second issue is that alcohol in the middle ages was typically much lower in alcoholic content. Particularly wine, which was often watered down anyway. This is important because drinking culture is different to that of 1000 years ago. Today people drink alcohol of a stronger content, and more of it. They also drink more water, meaning alcohol isn't just used as a means of rehydration as it more commonly was back then. Clearly, women who drank while pregnant back then were still taking a risk, the same risk that pregnant mothers take today if they drink. But by comparing alcohol content and the way drinking culture has changed, the risk was much lower for mothers in the Middle Ages.
Obviously I'm not condoning anyone drink while pregnant. It was a dumb thing to do then and it's a dumb thing to do today.
Medieval advice to pregnant mothers: don’t drink water, have wine instead
Further Reading:
...people preferred wine/beer to water during to the middle ages...
This presumption is entirely wrong and creates a false dilemma. See these threads: