For this achievement, you must use every character that, by default, walks on the ocean floor in deep enough water. The easiest place to get this is in the hub world, the level select area has a deep enough section of water if you move towards the screen.
You'll need to unlock the following characters by playing through the levels, then finding/buying them as they wander around the hub world. Then hold Y to choose and switch to them.
I can confirm you can simply keep switching between the characters when you're on the ocean floor, you don't actually have to run around. Also, according to others accounts you need to use every character on the ocean floor in one play session, or you won't get the achievement.
The characters needed, in order on the character selector:
- Bootstrap Bill Turner
- Syrena
- Koehler
- Twigg
- Mallot
- Scratch
- Bo'sun
- Clubba
- Grapple
- Jacoby
- Jack Sparrow (Cursed)
- Maccus
- Clanker
- Jimmy Legs
- Koleniko
- Wyvern
- Angler
- Hadras
- Crash
- Penrod
- Davy Jones
- Quartermaster
- Gunner