Based on its current appearance, unfortunately the tree would not be expected to recover and will need to be replaced, though it's hard to diagnose exactly what happened from the photo. It's possible root damage or stress occurred a while before symptoms manifested; it's not uncommon for there to be a lag time between them. It's also possible it had insufficient roots when it was purchased, since cooler and wetter spring weather can mask root system insufficiencies until a plant becomes stressed in summer. While Bald Cypress are very tolerant of wet soils, perhaps the right combination of conditions still lead to root rot, or maybe drought stress did too much damage despite being occasionally watered, since it was still in the establishment phase.

If you replant, make sure that the tree is set up for success by loosening any tangled roots well upon removing the plant from its container, digging the planting hole at least twice as wide (and only as deep) as the root ball, locating and situating the root flare at the soil surface (it's often buried in nursery-grown trees), and monitoring closely for watering needs.

Miri