The wet towel came from Fred Barker's article in Precision Shooting over twenty years ago. He was trying to wipe candle flame soot off the brass with it, and get the case cool enough to handle. I suspect he also may have been concerned about heat finding its way to the head, since he did it in his molten lead method, but I've put thermocouples into primer pockets to watch the heat during flame annealing, and the heat capacity of the thicker sides and much thicker head is so high and the thermal diffusivity low enough that the critical temperature extremes never move back that far even without water cooling, so just setting them down on a surface is fine.
Back in the 1960's, Wm. C. Davis investigated the common practices at the time, commenting:
"Most reloaders excessively heat the necks, causing formation of a large-grain brass structure, extreme softness, and lack of 'spring', or ability to hold the bullets in the necks. This results from the usual advice, "Heat the case necks until red hot and then knock the cases over into water". While the neck so treated are indeed unlikely to crack, they may be so soft that they can be squeezed together between the fingers, which is a good way to judge their relative softness."
Barker's methods are still worth looking at from that standpoint, as they use low flame or molten lead temperature over a longer exposure period to achieve the desired result. He insisted a candle flame could not overheat a case when used this way, nor would the molten lead cause over-softening.
"(1) Lead Pot Method: heat lead to 725°-750°F; dip neck into powdered graphite and then holding body of case in fingertips into molten lead: when case body becomes too hot to hold slap case into wet towel; or
(2) Candle-flame method: Hold case body in fingertips, place case neck in flame and twirl case back & forth until case body is too hot to hold, then slap case into wet towel; wipe soot off neck % shoulder with dry paper towel or 0000 steel wool."