I just started a save in a custom town and noticed, on the first day, most of the sims heading to protest at city hall. For some reason, however, they all headed to the farthest corner of the map, way out in the ocean, and just stood on the water. Has this happened to anyone before? Is there a way to fix it?

It may be that this is not the City Hall protest but one of the NPC rebel protests that came with University Life. These can take place anywhere in the world on random days, and, yes, I also had it on the surface of the ocean before as well.
After this incident I made a mod that stops these protests completely (but not the City Hall ones), but I haven't uploaded it yet.

Well, here's mine:

Can't quite make out what they are protesting. Steaming cups of coffee?

My sims were protesting against nessie. I find this odd as the entire town is populated solely by supernaturals.

Wow that's fabulous, Don.

So those Sims are the real Sons of SimJesus, standing on water surface?

lmao this is great. But I haven't seen much NPC city hall protest either in my game. A bit confused on what is going there but it seems like the more expansions you have the more stuff messes up.

I'm both relieved and utterly disappointed that that hasn't happened in my game yet

Be more relieved than disappointed, please. In Starlight Shores, for example, I had several protests in the hilly area behind the Buckshot mansion. And as it seems that Sims require a flat ground for proper protests they all usually ended up half-submerged in the uneven ground and get stuck.