Option 1 states that the speed of sound waves in steel is higher than that in water. This is true because the speed of sound waves in a medium depends on the properties of the medium. Steel is denser and has a higher elasticity compared to water, resulting in a higher speed of sound waves.

Option 2 states that the speed of sound waves in air decreases with an increase in temperature. This statement is incorrect. In reality, the speed of sound waves in air increases with an increase in temperature. This is because when the temperature of air increases, the molecules move faster and collide more frequently, resulting in a higher speed of sound.

Option 3 states that the speed of sound waves in air increases with an increase in temperature. This statement is correct, as explained above.

Option 4 states that the speed of sound waves in water is higher than that in air. This statement is true because water is denser than air, and sound waves travel faster in denser media.

Therefore, the correct answer is option 2, as the speed of sound waves in air actually increases with an increase in temperature.