It's an interesting technical challenge. Water, like air, is a fluid medium - but the similarity ends there. I would guess that this is a very short range weapon, on the order of 10-15m.

For anyone wondering, a standard brass cartridge, loaded with smokeless powder will fire underwater - same as it will fire in a vacuum (the powder is self-oxidizing). I'm a little surprised they're using compressed gas to drive the bolt, but I'd guess that there just wasn't a slow enough powder to launch the bolt at the necessarily slow velocity.

BTW, when I was growing up my dad was president of a gun club. One afternoon, one of the guys showed up with a rocket pistol (picture a very small solid rocket shaped like a bullet). Very cool to watch as the rocket was angled to spin the projectile. Absolutely no recoil, just a minor clunk from the next round moving up into firing position. Semi-auto, as that's what non-military are allowed in the US. This was on a pistol range with a backstop made of railroad ties, then dirt, then ties again. penetration was a bit less than the match ammo I mostly used (which was pretty underpowered compared to standard loads).