Pickett made contact to Waterman's head in the opening seconds of the Demons' 32-point win on Sunday and showed immediate concern over his role in the incident.
The 24-year-old has a lengthy tribunal record, including multiple suspensions for bumping opponents in the head.
But he has worked hard to attack contests in a different manner and it was ruled his actions were not unreasonable in the contest with Waterman.
Pickett had his hands out reaching for the ball in what Demons coach Steven King described as a "legitimate play" for possession.
AFL match review officer Michael Christian agreed on Monday when handing down his verdict.
"The ball is handballed in the direction of Waterman with Pickett approaching from side on with his eyes firmly fixed on the ball," the AFL said in a statement.
"As soon as Pickett realised Waterman was going to take possession of the ball he decelerates, lowers his body and drops his right arm in an attempt to minimise impact before making inevitable contact to Waterman.
"It was the view of the MRO that Pickett did not elect to bump and that his actions were not unreasonable in the circumstances. No further action was taken."
King launched a passionate defence of Pickett in his post-match assessment, pointing out that Waterman was not seriously hurt and even quoting the Eagles forward's statistics.
Waterman kicked 3.5 and had a game-high 13 score involvements as one of his team's best players.
Pickett has enjoyed an outstanding season so far, relishing greater responsibility in the midfield in Melbourne's first year with King at the helm.
"Kozzy's a leader, he's matured a lot as a player and he knows how important he is to us," King said.
"The way he plays the game is on the edge at times because of the talent he's got and how hard he is around the footy.
"When we saw the replay, we got the message pretty quickly to Koz that he was making a play on the ball and you'll be fine."
Richmond's Jacob Hopper and Kane McAuliffe can accept $1000 fines after being charged respectively with attempting to trip and careless contact with an umpire.
The incidents occurred in the Tigers' 37-point loss to Adelaide on Sunday.
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