This big octopus is showing one of the octopi's cleverer defense mechanism - she's holed up and is safe in her crevice from the attentions of what she thinks might be a predator (me). As a result she won't fire ink as a distraction as she's not going to bolt for it. Instead she's going to fire jets of water at me with the syphon she usually uses for propulsion and water circulation.
I've noticed this behaviour a few times - probably the strangest was a few weeks ago. I was fishing the sandflats and wading in 12 inches or so of water when I saw a huge octopus way from cover in the middle of the sand. After running through a few colour displays it started firing water at me shooting it out of the water and into me as I leaned down for a better look!