The fountain spent its time in the "Lake of the Moon", somewhere in the region of Florida, until the events of Act I: Blood. It became the center of a massive battle involving the Circle, Knights of St. John, Elisabet Ramsey's pirates, Sahin's Ottoman companies and Seminole natives. It is destroyed through the use of a Fixed Gun, military ships and artillery. After its destruction, protagonist Morgan Black fills his canteen in the water of the Lake of the Moon, leading to the belief that he drank the water. Eventually the lake dried up and became a swamp by the events of Act III: Steel, where the Circle tries to dig up lost Spanish treasure ships. Later, Amelia Black meets an individual who is only identified as the Old Coot, who in the end says "you defeated the Circle, and in just one lifetime too", implying that he is in fact, Morgan Black.
An easy way to destroy the fountain is to destroy the outpost on the neighboring island, then position Mortars to attack it along with the captured Fixed Gun and also create a fleet of ships (primarily fireships and galleons).
This is the best overall strategy for the Hard difficulty of the game, minus the fireships which are less important than regular naval vessels that can support land forces guarding the base and fixed gun as well as protect the fixed gun from enemy attacks by sea.
Some players may wish to postpone it's destruction in order to destroy the large Boneguard base and farm experience from the endless appearance of Boneguard naval vessels (even after the land forces and structures have all been destroyed). For most players this is only realistic on the Easy difficulty setting due to the limited technology level available to the Knights of St. John. Destroying the base is a matter of careful micromanagement of all Falconets, Mortars, Crossbowmen, Seminoles and heavy use of Lancers.
Once a number of the base's structures are destroyed (including their docks), the enemy will be reinforced with a large army (50+ units) of Doppelsolders, Cavalry, Boneguards, and Falconets. Enemy naval vessels, now including Frigates, will continue to spawn in the bay near the ruins of the Boneguard base (where their docks had been located). Simply park a large fleet here and periodically replace ships. This is only useful to those investing time into leveling rather than merely using a cheat code.