During the Obra Dinn's last voyage in 1802, the good ship was assaulted by various hostile creatures of the deep that the book generalizes as "terrible beasts". They were all most likely drawn in by the presence of the shells.
Lured by the presence of the chest, Second Mate Edward Nichols, his fellow mutineers, and the kidnapped Formosans were assailed by a multitude of mermaid-like creatures. They possessed dark and messy hair, sharp claws on their left hands, a banded tail, and spikes on their backs. They appeared to have three pairs of visible breasts. Some wielded spears.
While attacking the boats, one of the Formosans, It-Beng Sia, opened the chest and activated its defenses, which summoned columns of fire that stunned the mermaids. Nichols then hauled them onto the lifeboats. They were hauled up in a net, but one of them indiscriminately shot spikes. They got subdued and placed in nets to be carried to the lazarette, as instructed by Captain Robert Witterel. One mermaid fatally struck the cook with its tail, causing the seamen carrying it to lose their footing and fall down some stairs. William Wasim, one of the seamen carrying the mermaid, snapped his neck. Fillip Dahl, convinced that the mermaids carried a curse, attacked John Naples, perhaps in an attempt to dissuade the crew from taking them.
Following the mermaids' captivity, several other beasts assaulted the Obra Dinn. While the Kraken attacked the ship, Captain Witterel held the mermaids responsible for summoning the Kraken as a rescue call. He ordered them to call it off, killing two of them in the process, and threw two shells overboard.
After they called off the Kraken, Third Mate Martin Perrott was joined by stewards Paul Moss and Davey James in setting the surviving mermaid free. Immediately after opening the mermaids' cage, Perrott was spiked before he got the mermaid to understand his intentions. He ordered the stewards to give it a shell and throw it overboard. In return, Perrott asked the mermaid to see the Obra Dinn to safety, which it fulfilled, though without any live passengers.
The shine/aura of the shell given to the surviving mermaid can be seen portside by the investigator when they aren't using the pocketwatch.
Crab-riders and giant crabs
Shortly after the mermaids' captivity, two crab-riders boarded the ship and fought their way towards the lazarette.
The crab-riders were humanoid in figure, but were covered in a hair/seaweed-like substance that obscured their faces. A pair of glowing eyes were visible from underneath their exterior. They primarily wielded spears.
The giant crabs looked similar to spider crabs. They had spikes protruding from the back of their carapaces that could be ejected to kill prey. They also used their claws to attack.
Unlike the other two beasts, the crab-riders are seemingly not based on any existing or established nautical lore.
The last and largest beast to accost the Obra Dinn was the Kraken. After the crewmen killed the crab-riders, the mermaids called on the Kraken to attack.
Only the Kraken's tentacles were visible. Its tentacles seemed to be surprisingly dexterous, as it managed to locate and interact with various crewmen and objects. It retreated after Captain Witterel killed two of the mermaids and threw two shells overboard.
The Kraken was also the only beast that was mentioned by name.
The overall shape and appearance of the Kraken is unknown, only its large tentacles, similar to those of an octopus or squid, are shown in-game. In The Escape, Part 1, Alfred Klestil refers to it as "the squid", but it is likely that he is guessing based on its tentacles. In real-world mythology, the Kraken is typically depicted as a large squid or octopus.