In this example I calculate fep for one water molecule ( TIP4P with dummy-site and lj/cut/coul/long pair_style ) inside many the tip4p water molecules ( with tip4p pair_style )
But i don’t know if this way is the usual way for water free energy calculation or not !
To find out if this is the usual way you really should check the literature. I am sure you are not the first one to do free energy calculations on water.