auv-ee, sliced and diced sound does help. I'd sincerely hope a submarine or towed search vehicle would not use human ears* (which can dig signals out of noise if well trained). A simple 100Hz to 200Hz FFT, of the sort RR NDB showed is about as good as can be done. And it's probably close to what was done. If there is very much chirp on the signal it might not hit the filters as well. And if they were partially buried their 1700 meter range might get as low as a few hundred meters. 6dB loss would cut range to 50%, and put the towed pinger detector just barely at the edge of its range. 6dB loss is not much depending on how the pinger couples sound to the water.
Note that pingers like watches use are resonant chunks of piezoelectric material that are excited directly as part of the oscillator circuit. Burial in mud might do bad things to the waveform and frequency in such a modulated oscillator
* In such a case as this with a 37kHz or so ping, well outside human hearing range normally speaking, a simple frequency converter circuit could be used just as is used in typical radios. One of the radios I have works down to about 1kHz to 16kHz depending on the filter in use. (I, er, um, doctored my R-390A just a wee bit. {^_-}) That could be coupled into the ultrasonics from the sonar detector and convert them to human hearing range very nicely. In such a case the human ears might have detected something the FFT techniques would have trouble with. That's a long-shot "might", mind you. (Note that human ears actually work on a "bazillions of resonant circuits" basis. This leads to some unfortunate hearing pathologies as well as fascinating abilities to sort out sounds from noise. Two ears also helps.)
{^_^}