Answer: We all know that the definition of Chametz is a grain of flour that comes into contact with water and stays this way for long enough until it leavens. We must now determine how it is possible to wet the Matzot in one’s home with water. Should we not be afraid that the flour contained in the Matzot will leaven? Rather, the answer to this is that once flour has been baked, we are no longer worried about it becoming Chametz, for it has already lost its ability to leaven.
Nevertheless, some of the great Acharonim are of the opinion that one may not soak a Matzah that has already been baked in water for we are worried that there are some particles of flour in the Matzah that were not baked properly and when flour comes in contact with water leavens. This is the problem of “steeped Matzah” mentioned in the aforementioned question. Some of our Ashkenazi brothers have the custom to act stringently regarding this matter, i.e. not to wet baked Matzah with water. This custom is especially prevalent among the Chassidim for this is indeed the opinion of Hagaon Harav Shneur Zalman of Liadi, the Ba’al HaTanya, among others. (See Mishnah Berura Chapter 458, Subsection 4)
However, most Poskim agree that one need not worry about this issue at all and they completely permit eating steeped Matzah on Pesach. Indeed, we rule this way Halachically and we have no concern whatsoever.
Thus, it seems that one would be permitted to mix “Matzah meal” (flour made out of ground Matzah) with water to make different kinds of cakes and baked goods, for flour that has already been baked can no longer become Chametz.
Nonetheless, one of the great Sephardic luminaries, Hagaon Harav Chaim Benbenishti, writes in his Sefer Knesset HaGedolah that it is forbidden to make cakes on Pesach using Matzah meal, for people may see these kinds of cakes and interpret that they are made from regular flour and come to the conclusion that one may bake cakes on Pesach using regular flour.
However, the great “Peri Chadash” (Hagaon Harav Chizkiya di Silwa, 5419-5458) rules leniently on this matter. Similarly, Hagaon Harav Yitzchak Tayeb zt”l (one of the greatest scholars of Tunis) disagrees with the Knesset HaGedolah in his Sefer Erech HaShulchan, for we do not find that the Sages of the Gemara were concerned that people would come to make such a monumental mistake and we cannot make such decrees on our own. Many other Poskim rule accordingly.
Summary: The custom of Sephardic as well as most of Ashkenazi Jewry is to permit eating baked Matzah that was soaked in water. Similarly, they may bake any kind of baked good on Pesach using flour made from ground Matzah. One need not worry about soaking this kind of flour in water or about what conclusions people may arrive at because of this.
