Near its sand lair.
The mimic octopus, Thaumoctopus mimicus, lives in sandy areas in tropical waters. It is often found in silty regions close to river mouths, otherwise not the most attractive diving areas. There it hides in holes, with only the eyes sticking out. Hence, it was not discovered until 1998.
To see a mimic octopus do its mimics, the dive guide sloooowly sneaks up on the animal, and then gently pushes it out with a short stick. The octopus then tries to confuse the would-be predators by mimicking all kinds of marine life, instead of trying to escape with speed. After a while, it finds a new hole in the sand or spot under a submerged log and disappears.