The BBC quotes a historian who says that obviously it wasn't that, but who is game enough to say it would be nice if Nessie were helping. Then, because it's the BBC, it gives equal weight to Gary Campbell, who curates Nessie's 'Official Sightings Register' (whatever that means). He says,
It is entirely feasible that some large sea creature disabled the submarine.
The World War One report from the captain of the British ship HMS Hilary a year earlier makes it clear that sea farers at that time were well aware of large sea 'monsters' that could be harmful to their ships.
The area of sea where the attack took place has a history of sea monster sightings - they have ranged from the north coast of Wales to Liverpool bay. What the German captain said could well be true.I guess we will never know, except for that five minutes of research found me the much more plausible and better sourced story that the sub surfaced, was fired on and immediately dived, but forgot to close the hatch (maybe because of some extra cabling ordered by Captain Kerch). The U-boat had to surface and was easily destroyed, whereupon it had to scuttle.
Because everything on earth now relates to Trump, I read this as first a story of first false press equivalency and second the story of a man who screwed up royally bloviating that an invented monster did it (and of his being believed by conspiracy theorists).