Your save games in my email helped me figure out the problem. I found this was a bug in the original COAS cd version. Someone fixed it for GOF, and the only time I've ever been to the Lost Ships City was in GOF and ERAS mods, so never noticed that COAS had this bug. It might have been patched by the devs, but I never received a patch for my original game, so the bug remained. But, I found it and fixed the problem.
Update Lost Ships City from the new Itch version. You will have to use the save right before you enter to put the suit on, but when you put in on, then dive, you will be able to properly take the suit off and re-enter the city.
Also, when testing this, I noticed that the underwater effect for DirectX 9 looked slightly different than the original DirectX 8 version, so I also updated the Maelstrom engine to make them more identical underwater, so that is updated too, along with some other updates.