Those of you old enough to remember the Gyrojet pistol that was marketed somewhere around the '60s may have encountered their ad for a speargun that operated on their system. The Gyrojet was really a small rocket launcher. The Gyrojet round is pushed by gases generated by burning solid rocket propellant that is contained within the projectile and vented through holes in the base of the round, therefore all the pressure is contained by the "bullet" and not by the gun. Underwater firing is no problem. Didn't have much muzzle velocity, but since it was propelled for a longer period of time, it retained nearly all of its velocity out to around 100 yards (at least on dry land, don't know about underwater).
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If it's made after 1918...it's a reproduction
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