The sea demons were a race that was enigmatic. It wasn't merely because their habitats were in the deep sea far away from land — which developed a physical barrier between them and the living beings on land — it was also due to their totally different world outlook and way of thinking. The things that they described would probably have a gargantuan difference with the way that humans understood things. Take, for example, the monsters that were differentiated by humans according to their grade of magic and aggressiveness, but they were differentiated by the sea demons with their chewiness ranking. It was simply too ludicrous, and it was impossible to have a proper conversation.
Therefore, Gawain didn't dare to determine what was the "giant squid" that the sea demons dug in the deep sea. He could only make a bold assumption from the descriptions mentioned by Tiel and describe it as something related to the gods. As for the exact thing… he would only know after seeing it personally.
