
Plot hole: There are six metal bars mounted around the circumference of the water wheel's axle. In the wheel's interior, when Jack frees himself he lands on his feet, begins to run and promptly hits his head on one of those mounted axle bars, then falls out. Moments later, when Jack returns and runs in the wheel, he is shorter (way more than a foot) than all six of the mounted axle bars spinning with the water wheel, which would make that previous shot impossible, however humorous it is. (01:52:40 - 01:53:55)
Answer: Yes, the idea is that this poor soul got too close to one of the Kraken's tentacles and one of the suckers pulled his face off. Presumably he can still breathe in some fashion, something has been left that allows air access to the lungs, allowing him to still be alive, although it doesn't sound like he's long for this world, so presumably the damage is extensive.
Tailkinker ★