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I am far from an expert on the toxicity of mercury (and that's nearly certainly just one kind of pollutant in this scenario), but it seems unlikely this would solve the problem.
The same amount of mercury is still being emitted, it just might lessen the amount that gets absorbed by immediately local soil... and just disperse it a bit more evenly over a longer range eventually mostly pooling along the shores of the Gulf of Mexico.
Which... is still part of a protected natural environment with endangered species living in it. As I recall, there is specifically a species of endangered turtles that live in this area, so, they're still fucked, along with I think some other endangered birds, reptile and small mammals.
What they should have is a proper method of containing this dirty water, filtering and extracting dangerous chemicals, and a proper way of disposing those.
But that would require foresight and planning, which is anathema to Musk's 'move fast and break stuff' style of 'rapid iteration'.
Also, It is not true that large sections of uninhabited land are necessarily zoned as some kind of protected habitat. It is true there are lots of areas of the US where this is the case, but not totally.
Musk was trying desperately to get NASA to let him use Cape Canaveral for Starship, but they viewed this (correctly, in hindsight) as too risky.
So, when they said no, and he had deadlines to meet, basically said 'fuck it', took his existing facility and massively illegally upgraded it far beyond what was legally allowed by initial use permits, and just did everything Starship there, generally completely ignoring any concept of 'regulations' that might apply to this.
He could have actually given investors and NASA themselves more realistic budget and timeframe ideas for how expensive and time consuming it would be to do this properly, but he did not.
It is also important to note that the dirtiness of the water may have been misreported. It seems possible that this story is based on two typos in the Texas Commission on Environmental Quality report. The actual concentration of mercury may be 1000x lower.