If something is described as a "liquid level switch", and contains a normally open contactor, would this imply that a dry sensor would cause the contactor to open, and a submerged sensor would cause the contactor to close? I get confused on the term "normally". To me, "normally" being dry or wet depends on the application, I suppose.
Depending on the sensor type liquid level sensors can be either always submerged or always dry. They don't usually sense wetness or dryness. A sump pump level sensor has a switch that closes when the liquid rises above some level and remains closed until the liquid falls a certain amount below that level. The same sensor may have a second switch that closes when the liquid rises at an "alarm" level.
I agree that "normally" is usually the condition when the system is dry or de-energied.
I agree with the above comment that the "normally" state is the sate of the device in a resting condition such as laying on your bench, not submerged in fluid.
Is the device a float switch? Or does it simply use the fluid as a conductor to close the circuit?
If it uses the fluid as a conductor it has to be open when not in fluid and closed when submerged.
There are also other types of level sensors that use capacitance of the fluid.
Telling us what the component is and providing a data sheet would be helpful in answering your question.