The bear sure looks like it is drinking, but in reality, there is hole in the the bottom of the cup. A tube starting at this hole runs down the arm, across the back, up the right arm, and into the bottom of the bottle. The motion of raising one arm drains the liquid into the other, allowing the bear to drink endlessly. It's an ingenious design.
From the eBay description of this drinking bear:
The Decamps electric Dinking Bear is a fun automaton and one of a very few that uses water. Switch on his electric (120v AC) motor using the roller switch in the cord and the bear will raise his right arm pouring water out of the bottle and into the cup in his left hand. Then he raises his right arm, tips back his head bringing the cup to his mouth and “DRINKS” the water, and then tips the cup just a bit more as if trying to get the very last drop! You could color the water to your favorite drink color for a little extra fun!
Here is the full ebay listing with many photographs and a lengthy description of this vintage motorized drinking bear automaton