Since I am seeing more and more posts about it here is a copy of one of my posts on reddit on how to deal with it when you have enough supplies to manage. I recommend at least 150 cannon balls, planks and bananas to keep on board at all times to cover for most encounters in the game.
The cooldown on the kraken is 2 hours, ~5min between when forts and fleet battles rotate as they lock out its spawn when there is one active in the session and no one has done it. She also attacks ANY ship in the session at random in this time frame, amount of loot is not a factor at all. (I can also confirm again from my experience that she will pop right after a merge to another session almost guaranteed hence another reason to keep your supplies up and be ready).
Get a Galleon crew together and when it pops all use a Blunderbuss and Eye of Reach. Keep the last round in the guns so that you can skip a good chunk of the ammo reload animation when going back and forth from the ammo box on the ship. This combination lets you do the most damage per pellet and less going back and forth for ammo so you can all focus them down.
Aim for the head of the tentacles when they show especially the one that wraps around the ship to get it off the ship as fast as possible and focus down the closest ones first working your way around the ship as they pop up to the ones further out.
When it wraps make sure you are paying attention to where it pops is head up, there is no point to trying to kill it via the body that wraps the boat you will do no damage this way. If it wraps blocking the stairs it becomes a 50/50 chance between you taking it out in time before you get sunk, as such, the optimal places for it to wrap during a fight is the back and front of the ship.
Keep one to two crew on bail and repair duty, rotate people as needed for this. You can bail through the wrapping tentacle if it wraps above the stairs at this point in time (might change in the future) when you angle the throw of the water with any space available over and out of the ship.
Kegs are a one shot on the tentacles as well so if you have a stock of them you can use them on a few of them to speed up the fight (best used when they suck you up).
Once all go back into the water and the black around the ship disappears that is when you have defeated it and it should count on the commendations for it.
It will not count when you are in an alliance and are not a ship in the black nor will it count if you are on the ferry of the damned at the time of the kill.
Make sure to have a rowboat on your ship in the event you do sink so that you can still collect any loot in the water for the ones that you have taken out or recover any loot that you did have at the time since it does not sink with the ship.
There is a 5min timer on loot when its on the surface of the water and will glint when in range to be seen, one or two people can rotate interaction of the more important loot whilst the others bring the ship back to where it was sunk if you don't have a rowboat.
I know you may think its easier in a Sloop but from my experience its easier to deal with overall in a Galleon and don't bother doing the hunt in a Brigantine, it is too much a glass cannon ship to even bother.
Yes the dev's are aware of the difficulty and the odd bug with it since they fought it in the recent stream and got sunk, so you are not special thinking that you are feeling like its targeting you specifically and you are having trouble with it.
