I had the head gasket on my 1200 GX replaced with a new one (the old one leaked). The mechanic who did the work put water in the radiator and told me that it needs to run on pure water for up to a 1000 km. This is so that the head gasket can seat properly. Personally I dont like having pure water in my cooling system. Is this really needed? What will happen if I diluted the water with some normal (green) coolant before 1000km?

I have never heard of that. Here in USA we never use plain water

However, in the old days, when plain water was used, it was supposed to be changed every 500 miles. So change the water at 500 miles, then when it gets to 1000 miles, drain the water and put in green coolant (ethylene glycol). It prevents corrosion of the iron block and reduces interactions between the aluminium and the iron

I always put coolant in, never had a gasket problem

1972 decal - ethylene glycol installed at factory - before 1000 miles