in the theme song or whatever, it says under the sea, not underwater. The air could be moist enough that sea animals could survive, which would probably be problematic for land animals(like Sally squirrel)
imgflip.com/memegenerator/182613593/cross-eyed-spongebob(paper does badly in water), Squidward has an oven, there's the thing SpongeBob cooks Krabby patties on, this guy was once mopping up a liquid in the show there's this part where plankton's playing with the thermostat and only the water on the floor(which you can clearly see btw) freezes.
