Originally it wasn't meant to be that deep with a story and mostly up to interpretation but I'm gonna think about it now just for you anon so here's what I came up with:

DISCLAIMER this au is something caratland is probably not used to and I am too much of fear and hunger enjoyer so it's a bit inspired by that game with the world building and themes of mythical creatures EXCEPT it all revolves around sea and is still not as drastic as the game iykyk.... Jeonghan is also very "morally gray" in this one just like his this man persona type character but much more of a monster (he only kills evil people smh) the way I would describe his character here is guardian angel to an extreme

I think Jeonghan and Joshua were childhood friends(who had romantic feelings for each other) who lived on an island in a very weird village that was corrupted at it's core. Jeonghan was sacrificed for being rebellious and everything was covered up to look like he was just missing while his body was thrown to the sea, Joshua didn't believe it fully because he was really close with Jeonghan and knew he wouldn't just disappear like that. He grows up and becomes a devoted priest to one of the old gods, the sea goddess, praying to her so that he can find Jeonghan... He also meets Jihoon (a local bard) who helps him cope with the loss of his friend but then some years later just when Shua wanted to propose to Jihoon, he disappears in a similar way...(He really lost his two lovers ouch...)

While all that was happening Jeonghan was going through absolute hell as a lonely hungry mermaid at the very bottom of the ocean because that's where his body got thrown from a boat... Until he meets jihoon by accident

Eventually after MANY years Joshua accidentally reunites with Jeonghan, their meeting is MESSY. Apparently Jeonghan and Jihoon now are together AND ARE MERMAIDS?! They also have been watching and "protecting" Shua from afar not wanting Shua to see how his past relationships turned into monsters... Now 50~ year old Shua says he wants to join them and he doesn't care that they are monsters. With some hesitation Jeonghan decides to turn Shua (despite promising to Jihoon to keep Shua as a human because he doesn't deserve to turn into a human eating monster). Shua then loses his humanity and turns into a mermaid. Jihoon is VERY mad at Jeonghan about it, but they try to work things out to not make Joshua sad. Shua and eventually Jihoon try to not eat humans even tho it means going against the sea goddess powers which makes them overall weaker (they eat fish instead just enough to satisfy their hunger but it doesn't give them much power like a human kill). Jeonghan doesn't get it, humans were the reason they ended up like this in undead magic bodies that are forever trapped under water for most of their lives with having a build in need to eat humans. (+They can turn into way more horrific ugly monster versions of themselves if they become too hungry or too powerful)

Years pass and humans start to develop more technology and are better at hunting all kinds of sea monsters, mermaids included. Humans also start a war between each other, and at that time they notice Seokmin, a young man with a beautiful singing voice that Jihoon fell in love with from afar. After seeing that Jeonghn got protective of his two boyfriends and said to not get close to anyone who is an armed soldier because he doesn't want to lose them (especially when they are far weaker because they refuse to eat humans). What Jeonghan said doesn't stop Jihoon who keeps meeting with Seokmin in secret, he learns that Seokmin was forced into the army and how much he doesn't want to be in it and that singing helps him calm down. After Seokmin gets the courage to refuse being a soldier he gets killed and thrown into the water but Jihoon was there to take him and give him a second chance in life as a mermaid because he knew Seokmin doesn't have as much hate in his heart to be turned just with the power of sea goddess.

Despite being sceptical at first Jeonghan and Seokmin actually got along really well, and Seokmin is the kind of sunshine person Jeonghan needed. Then they decide to find a very small island that they settle on trying to be just far away from humans to live a peaceful undead mermaid life. Except Joshua (the only extrovert..) gets bored and Jeonghan is hungry for human meat, so both of them go on expeditions starting with smaller nearby islands occupied by humans. Joshua makes friends with them and brings fun things home for seokhoon, and Jeonghan is there with him to protect Shua just in case (while also eating humans he sees as evil). That's also the first time they are actually using more of their shape shifting powers though Shua is much worse at it only being able to shape shift for a few hours. And he's also trying really hard to go against his instinct and not eat humans he interacts with.

While going to one of the islands that was especially developed but also very affected by the war even after years, Shua and Jeonghan eventually meet Seungkwan, who wants to become a singer but he comes from a family that lost almost everything so he just works hard to help them out. Seungkwan also learns their secret that they are mermaids and he is fascinated by it, thinking it was just a legend that they exist, because mermaids stopped showing up when the war started. Seungkwan also meets Seokmin and Jihoon, who after a while also decided to sometimes come on land, Jihoon also helped with making music for Seungkwan so that he could try to enter into the newly made music industry (side note the internet doesn't even work properly in this universe yet and other creatures like mermaids just became more hidden when humans developed)

As time goes by Jeonghan really falls in love with Seungkwan the more he spends time with him and even feels like the innocence he used to have before he was killed is back whenever he's with him. But he also thinks humans don't deserve a person like Seungkwan who always wants to help and bring comfort to people. Jeonghan even thinks how he could possibly help Seungkwan and his family... Let's just say there could be an ending where he kills rich people in power and it's almost like revenge for his own past as well, after all he is smart and very powerful with many years of killing evil people in the name of his sea goddess

Also I do have a cute scene in mind where one time only Jeonghan comes to visit seungkwan for the night and 23 year old Seungkwan tries to explain to Jeonghan who was born 300-400~ years ago what are the electrical things in his room (CD player and such) meanwhile Jeonghan tells old stories and legends to Seungkwan as a bed time story... So cute...

AND NOW I HAVE SEVERAL WAYS IN MY HEAD ON HOW DID SEUNGKWAN CHANGE INTO A MERMAID but they are honestly all kind of too much and not organized in my head so I leave it up to imagination...

Maybe something bad happened humans try to hunt vcu (maybe because of Jeonghan murders...) and Seungkwan dies protecting them and turns into mermaid or maybe mermaids stop being seen as monsters and Jeonghan learns not to eat human meat at all and Seungkwan willingly becomes a mermaid because he's in love with vcu or maybe something else happened not involving mermaids at all where seungkwan dies too young and vcu decides to turn him who knows~

But they do live long and happy eventually that's for sure ^^ they probably also come to visit Seungkwan's family often, maybe make their own little cosy home on that island that also has an underwater part, maybe they do even eventually live in a modern world and visit the city sometimes... My silly little mermaids who went through a lot ouch

And no I can't write fanfics I can only write story concepts like this....