I brought the Ark underwater to fight about 600 Ermorian undead (mostly non-sacred). There was no battle enchantment icon for the Ark, and enemy units did not take any damage from it.
Also, according to the battle report, the commander holding the Ark did not die: Commanders 2, killed 0. But when viewing the battle, he runs away. He's carrying a Barrel of Air, and there is a friendly province for him to retreat to. But the message log says my commander died retreating into enemy territory (and I can forge the Ark again, which is a bad sign

).
Is the Ark supposed to work underwater?
Can an underwater fleeing commander flee to a friendly neighboring underwater province, if he is a land-based unit wearing a water-breathing item?