The correct statement that illustrates Newton's third law in the context of how an octopus propels itself through the water is:
When the octopus ejects the water out, the water acts with an equal force on the octopus in the opposite direction.
This is a direct application of Newton's third law, which states that for every action, there is an equal and opposite reaction. When the octopus pushes water out of its siphon, the action of the water being expelled creates a reaction force that pushes the octopus in the opposite direction, allowing it to move through the water.