Complex sentence: The action was not reported in the London Gazette, and was considered a defeat by the Admiralty, who were particularly disturbed by rumours that began to circulate concerning the death of Captain Corbet and the behaviour of his crew during the battle.
Split into simpler sentences: The action was considered a defeat by the Admiralty and was not reported in the London Gazette. The British naval authorities were particularly disturbed by rumours that began to circulate concerning the death of Captain Corbet and the behaviour of his crew during the battle.