Well that last slide is just a hint that the algorithm isn't completely right yet. It is clear that every square to the left should be completely white because there is no chance of a ship being there.

A better way to calculate would be: given that a ship is here, what is the probability that other ships are in the other spaces. It's more complex but you can rule out a lot more spaces.

I'm aware of Nash equilibrium, I'm just curious about what it is for this game.