I am reviewing the paper the second time and I found it improved. I also believe that the topic is highly of interest for the HESS readership and, hence, the paper deserves to be published. However, I still have major comments to be addressed, mainly related to the interpretation of the obtained results and, hence, on the conclusions.
1) In the analysis of the results in terms of soil moisture simulation at page 17 it reads that after assimilating soil moisture, results of global (PCR-GLOBWB) and local (OSWS) model are closer to each other. It is surely true, but I see that the results of the global model are still significantly lower than the local model (e.g., correlation is around 0.5 for global model and >0.75 for the local model). I believe that this aspect should be clearly underlined, otherwise it seems that after the assimilation the global and the local models give similar results, and it is not true.
2) It reads in the discussion that discharge data, if available, might be used for the calibration of the global model parameter values, instead as data to be assimilated. The authors are looking for alternative methods for improving global model, not considering the calibration of parameter values. I understand this point, but if discharge data are assumed to be available, I strongly believe that their use for model parameters calibration will have a much higher beneficial impact on the results with respect to their assimilation. In my opinion, this aspect should be clearly acknowledged in the paper.
a. Differently, the use of satellite soil moisture data is fine with me as it is applicable also in ungauged basins, and for me it should deserve much more attention. In other words, instead of underlining the results after the assimilation of both soil moisture and discharge, the results after the use of only soil moisture data should be more discussed, as the only results really applicable everywhere.
3) In the previous review I suggested some points that are not considered in the current version, and it reads in the discussion that it will be addressed in “future research studies”. While I understand that performing additional analyses is always difficult, I believe that some of the conclusions are not related to the results and should be better analysed, or removed.
a. More specifically, it reads that the positive impact of the assimilation of satellite soil moisture data might be due to their fine resolution. I believe that running the model by using the AMSR-E soil moisture product without the downscaling procedure is a small effort, and it will clarify if the benefit should be related (or not) to the fine resolution of the soil moisture data.
b. Similarly, it reads that the finer resolution of the local meteorological forcing is the reason of the better performances. I expect that local observations have also higher quality with respect to the global data, not only a finer resolution. Therefore, to understand if the better performances are due to the data spatial resolution or data quality, a model run with artificially upscaled local observations (and then downscaled as the global dataset) will be useful to clarify this point.
c. Finally, also the sensitivity analysis related to the assumptions made in the data assimilation method is left to future studies. I could agree, but knowing the large impact of these assumptions in the results, I believe that at least a preliminary sensitivity analysis for one/two case studies should be performed to provide more robust results (not affected by the subjective choices made in the assimilation).
In the specific comments, I added some corrections and suggestions that should be implemented.
On this basis, I believe the paper deserves to be published only after a major revision.
SPECIFIC COMMENTS (P: page, L: line or lines)
P4,L19: Not only the lateral groundwater flow is neglected in global hydrological model, but any lateral flow. I suggest removing “groundwater”
P9,L24: I would specify air temperature
P18,L24: specify in the text that results shown in Figure 9 refers to multiple river sections