This quest was bugged for me, and no matter where I went in the water, I could get the “submerged bug” but I could not get the cutscene to play.
According to WoWhead, if this happens look for a mercurial ooze that is evade bugged in the wall of the tent. You have to kill the evade bugged mob, and then the quest should work fine. I did this, and instantly was able to complete the quest.
Also, in the time it took me to figure out how to submit a bug report and type this up, the ooze has already respawned in the evade-bugged position so that the next players going to do the quest are going to encounter teh same bug.