The correct option that illustrates Newton's Third Law in this context is:
When the octopus ejects the water out, the water applies an equal force on the octopus in the opposite direction.
This aligns with Newton's Third Law, which states that for every action, there is an equal and opposite reaction. When the octopus ejects water out of its funnel, it exerts a force on the water to push it out, and in response, the water exerts an equal and opposite force back on the octopus, propelling it forward.