The fact that you cannot wrap your head around something doesn't mean that it's not possible. I do not claim that it is surely possible nor that it isn't. But it sure as hell looks possible.
You also probably don't have kids.
For example: how do you teach a child to speak? Or someone a new language? You show them some objects and their pronunciation. The same with the seagrass and/or a scarf. That's one way. Dolphins can also see (divers with) some objects and name them. We can also guess what they are saying from the sounds plus the actions they do. That's probably how we got "seagrass" in the first place.
For all the word that they don't have in their language, we/they can invent them. Just like we do all the time: artificial intelligence, social network, skyscraper, surfboard, tuxedo, black hole, whatever...
It might also be possible that dolphins' language uses the same patterns as our language(s) and that an LLM that knows both can manage to translate between the two.
I suggest a bit more optimistic look on the world, especially on something that's pretty-much impossible to have any negative consequences for humanity.