High ionic conductivity has been recently reported in hexagonal perovskite derivative materials. These systems constitute a promising class of novel electrolytes for application in hydrogen-based energy technologies. Herein, we performed the first in-situ hydration neutron diffraction experiments and atomistic calculations for the determination of the water absorption and ionic conduction mechanisms in the dual-ion conductor Ba7Nb4MoO20. Our results demonstrate a remarkable mechanism of water uptake and proton incorporation, assisted by the ability of the structure of accommodating substantial stacking and anion disorder. Simulations show high dynamic and rotational flexibility of the variable coordination MOx units, a crucial factor in enabling fast ionic transport along the palmierite-like layers. Such flexibility contributes to delocalisation of the proton defects and to the creation of a frustrated proton sub-lattice with high proton mobility and low energy diffusion pathways. These insights provide design principles for the discovery of innovative ionic conductors crystallizing in related hexagonal systems or disordered oxide structures.