I am not sure on the not being able to fish it up side of things, but as for the original issue; do you have the quest "Under the Sea" on your quest list?
I also had issues with my PLD Feet and it was because you can't actually complete the AF quest if this quest is active. You have to fish up a fish in Selbina and RNG trade it to the Galka to find a ring in its belly - Once you do that, it should then work.
I did the same where I didn't trade the bug to the kid, and was told to drop and re-fish it when it wasn't needed... But I was still able to catch it, are you using the same shellbug as the first one you used or have you tried it with another one? Other than giving that a go with a new bug I don't see what else you could do