Despite the pronounced polarity of C-F bonds, many fluorinated carbon compounds are hydrophobic: a controversial phenomenon known as "polar hydrophobicity". Here, its underlying microscopic mechanisms are explored by ab initio calculations of fluorinated and hydrogenated diamond (111) surfaces interacting with single water molecules. Gradient- and van, der Waals-corrected density functional theory simulations reveal that "polar hydrophobicity" of the fully fluorinated surfaces is caused by a negligible surface/water electrostatic interaction. The densely packed C-F surface dipoles generate a short-range electric field that decays within the core repulsion zone of the surface and hence vanishes in regions accessible by adsorbates. As a result, water physisorption on fully F-terminated surfaces is weak (adsorption energies E-ad < 0.1 eV) and dominated by van der Waals interactions. Conversely, the near-surface electric field generated by loosely packed dipoles on mixed F/H-terminated surfaces has a considerably longer range, resulting in a stronger water physisorption (E-ad > 0.2 eV) that is dominated by electrostatic interactions. The suppression of electrostatic interactions also holds for perfluorinated molecular carbon compounds, thus explaining the prevalent hydrophobicity of fluorocarbons. In general, densely packed polar terminations do not always lead to short-range electric fields. For example, surfaces with substantial electron density spill-out give rise to electric fields with a much slower decay. However, electronic spill-out is limited in F/H-terminated carbon materials. Therefore, our ab initio results, can be reproduced and rationalized by a simple classical point-charge model. Consequently, classical force fields can be used to study the wetting of F/H-terminated diamond, revealing a pronounced correlation between adsorption energies of single H2O molecules and water contact angles.