The correct explanation of how an octopus propelling itself through the water demonstrates Newton’s third law is:
When the octopus ejects the water out, the water acts with an equal force on the octopus in the opposite direction.
According to Newton's third law of motion, for every action, there is an equal and opposite reaction. When the octopus expels water from its funnel, it exerts a force on the water in the direction of the ejection. In response, the water exerts an equal and opposite force back on the octopus, propelling it in the opposite direction. Therefore, the octopus moves forward as it expels water backward.