LOOK AT THE ADORABLE CHIBI CASTLE! Doesn’t it just make you want to design an extensive series of water-themed sub levels for it?
Based on my (extremely rudimentary) research, I don’t think this is an actual period structure. More likely it’s a modern structure made to look like a castle. None the less I can easily imagine something like this existing. A noble lord’s retreat for fishing trips, or the citadel of a hobbit constructed in the human style. One particularly clever Imgurian suggested that it could be the embassy of an aquatic race–a place where humans and mer-folk could comfortably meet.