Well I will tell you right now that spear guns suck. I shot a catfish in the face from five feet away, and it bounced off his face like it didn't even bother him. That was with a modern device. I couldn't imagine using the crossbow that Geralt has with it having an effect on anything more than a karp sized fish; let alone a twenty foot long squid. Still this is a fantasy game not a reality simulator. If Geralt even got into the water wearing half the crap he has on it would end with him drowning.
You're right; diving in mail is a good way to make an anchor of your corpse. But I've lived off what I could shoot with a Hawaiian sling, so I'm willing to suspend disbelief for underwater crossbows.