You have now been given a piece of kelp. Walk to the sandy path to the right of the scene and then walk to The Edge of the Abyss. Ignore the Siren and use the knife on the oyster shell. There are two oysters in the scene, both on the sand at the edge of the abyss. Use the knife on the shell closest to the Siren.
Some oysters are empty and some contain pearls.
Ignore the empty oyster shells. Take the pearl and walk left back to The Seaweed Forest. Walk up the hidden path. This path is in the gap in the seaweed to the right of the sandy path, directly above the starfish, and walk to The Coral Path. Use the knife on the shell that is in front of you on the upper path.