Cartoon version of the physics: Breathable fabric is basically swiss cheese. The air diffuses through. By using the right fibers in the material, and/or coating those fibers, you can basically make the surfaces repel water in bulk - i.e. rain droplets. In cartoon version imagine big water drops bouncing off the much smaller swiss cheese holes. (yes, all my past physics professors are rolling their eyes, LOL). Now imagine enough of these water drops hitting the swiss cheese that some of them manage to get stuck in the holes. Now the water doesn;t have to squeeze through the holes as a drop. Basically it can just land on the water in the hole (which actually more or less attracts it), merge with that water, and then flow through to the other side. This is the case of "wetting out". Now your fancy rain jacket might as well be a transparent to water. Until you dry out the jacket (and hence the swiss cheese holes) it will not work. However, once you do it will be fine. However this is rather difficult to do in a rain storm, so you are probably SOL until it stops raining and your jacket dries out.
I will add that this picture also help you understand why there tends to be a tradeoff between breathability (size of the "holes") and waterproof-ness, why drying it back out fixes the problem, and why if the coatings wear off over time ("bigger" swiss cheese holes) it will not be as waterproof unless/until you restore the DWR finish. Incidentally in this respect the difference between water repellant jackets intended as windshells (like the Houdini) and waterproof breathable jacket is a matter of degree, not kind. You could wet out even a serious rain jacket (possibly) by holing in under water for a long time.
On the issue of wind protection it is a mixed bag and depends. If the surface of the jacket is separated from you by a layer of air, then probably the wind protection survives to a large degree - convective heat loss will be preserved. Probably a moot point though. Water conducts heat very well, and if the water hits your body, or even other materials next to you body the loos of heat due to conduction may be made much worse, and overpower the wind protection. Once water starts getting inside this is inevitable and things are going to get worse and worse until you can get the jacket dried out.