Octopuses have three different physical attacks that have an even chance of being used. The first attack always causes Slow without Slowproof armor, the second has increased accuracy, and the third has increased power and perfect accuracy and targets the party member with the lowest HP. If Provoked, it is forced to use its second attack.
Although the Octopus has a list of potential equipment drop abilities like most enemies, it is set to roll 0 random abilities and thus almost always drops blank equipment. The only exception is when dropping weapons for Auron or Kimahri; as with most enemies' drops, these will always have Piercing, but nothing else.
Octopuses are Armored, so Tidus, Wakka and Rikku may have a hard time damaging it unless one of them has Armor Break. However, it is weak against lightning, so Rikku's Electro and Lightning Marbles should be able to easily defeat it.
The one and only visit to this location is perhaps early for characters to have the Bribe skill, but those who do have it can obtain 20 Healing Waters from an Octopus for 4,500 gil each, where other fiends require 5,600 or more.