Ted and Zoey meet up later and both agree that they should stop hanging out if either begins to develop feelings for the other.
Barney claimed the theory comes from the fact that sailors used to picture manatees as mermaids due to long periods without female contact.
The argument continues at the bar with several plot holes, including motorcycles coming in out of nowhere and Barney's and Lily's mismatched personalities.
Eventually Ted remembers that this relates to events much later than the rest of the episode when Lily is pregnant.
The argument is resolved when Barney tells Lily that she can become a mermaid again when she begins breastfeeding.