So bringing King Gurgler back to a prison cell seems to have stopped the water spawns on Fishmen island, there are still some "camps" I noticed but I've been clearing those out. Also I'm not sure exactly how I did it, I think I picked the second option, then gave him a thin fish, then a grand fish, then put my hand on the bars? I have been trying random options here for like 10 minutes, but I think that was the order that worked to recruit him.

Oh so an update, it did not actually stop the patrols from spawning. They showed up later that day and keep coming occasionally, so if you want him in your squad make sure you can protect any bases you built down there.