Even though Spectacle Island is completely surrounded by water, everything you can expect of a typical settlement in Fallout 4 occurs here. However, due to the location and the water that surrounds it, some things can bug out from time to time. Since you can build defenses around the entire island, leaving only water outside of this radius, attackers will routinely spawn on the island itself, behind any defenses you may have created, circumventing your efforts.