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Looking closely at Pepper and the Siren, you can see that the Siren is wearing a life jacket and seems to have a much more humanoid look. This was something that was mentioned by @4ky0GvCLXOoAZXj , as there's previously been no human characters that have featured on the show.
I suppose there's one thing that's sort of holding this up, and that's the fact that there's yet another frog in this scene; a strong hint which I feel could lead my theoretical thinking to be true, as many of the episodes that take place in a swamp, often feature a frog or toad:
Then again, the river featured shows a much more closer resemblance to the one seen in the marshlands, most notably in " Ghost the Boy " and other episodes such as the " The Later Pile ". Once again, this is merely just speculative, and more just some ideas if anything!
As you can see, the scene as mentioned seems to take place in a river. What sort of river? Well I can't necessarily pinpoint which but perhaps the one similarly seen in " Pajama Pajimjams ", although this is just an assumption and doesn't particularly match the same mood: