They are found in the new underwater caves, and in the deep ocean. Squids found in caves however, are untameable. PASSIVE TAME!!! 2 people are recommended for taming (one for feeding, one to distract it). It is possible with 1 person, but you'll have to have a creature with very high health.
Use a Mosa to tame this beast. Let the Mosa get grabbed wait a couple seconds get off feed it black pearls. Have your mosa on follow lowest, swim a bit away from the Tuso after feeding it, when the Tuso lets go the Mosa will swim to you. Repeat until Tuso it tamed. Super easy!
You need two people, one for feeding the black pearls and the other to feed the turtle that is in the grasp of the Tusoteuthis, with sweet vegetable cake for the health and to feed it stimulates berries as well
Actually easier than youd think to find it go to the very corner of the island map doesn't matter which one but dive deep, use a tame with high health and let it grab it swim up to its mouth and feed black Pearl's (last hotbar slot) at the moment its x4 so its quick a lvl 75 takes one feed of 75 Pearl's 1000% worth the time to tame but gets some getting used to. Once tamed lvl up the health melee and stam for a beast that will dominate all it faces