2 Some small corrections but in the end I wrote my own answer.
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The sea level should decrease. Consider a boat before it sinks. It must displace a densityweight of water equal to the densityweight of the boat to have neutral buoyancy. The material comprising a boat is more dense than water, thus is less voluminous than the displaced ocean. This displaced ocean volume will be realized as a rise in ocean height. HoweverHowever, once the boat sinks this volume of of water is no longer displaced and this will be realized as a sea level fall.

Note that the sea level should be higher with a sunken ship than with no ship at all, so this answer depends on a working boat on the ocean surface being replaced with a sunken boat. Also note that the magnitude of sea level rise and falls being distributed across enormous surface area is likely too minisculeminuscule to be able to measure (e.g. smaller than instrument error).

The sea level should decrease. Consider a boat before it sinks. It must displace a density of water equal to the density of the boat to have neutral buoyancy. The material comprising a boat is more dense than water, thus is less voluminous than the displaced ocean. This displaced ocean volume will be realized as a rise in ocean height. However, once the boat sinks this volume of of water is no longer displaced and this will be realized as a sea level fall.

Note that the sea level should be higher with a sunken ship than with no ship at all, so this answer depends on a working boat on the ocean surface being replaced with a sunken boat. Also note that the magnitude of sea level rise and falls being distributed across enormous surface area is likely too miniscule to be able to measure (e.g. smaller than instrument error).

The sea level should decrease. Consider a boat before it sinks. It must displace a weight of water equal to the weight of the boat to have neutral buoyancy. The material comprising a boat is more dense than water, thus is less voluminous than the displaced ocean. This displaced ocean volume will be realized as a rise in ocean height. However, once the boat sinks this volume of water is no longer displaced and this will be realized as a sea level fall.

Note that the sea level should be higher with a sunken ship than with no ship at all, so this answer depends on a working boat on the ocean surface being replaced with a sunken boat. Also note that the magnitude of sea level rise and falls being distributed across enormous surface area is likely too minuscule to be able to measure (e.g. smaller than instrument error).

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The sea level should decrease. Consider a boat before it sinks. It must displace a density of water equal to the density of the boat to have neutral buoyancy. The material comprising a boat is more dense than water, thus is less voluminous than the displaced ocean. This displaced ocean volume will be realized as a rise in ocean height. However, once the boat sinks this volume of of water is no longer displaced and this will be realized as a sea level fall.

Note that the sea level should be higher with a sunken ship than with no ship at all, so this answer depends on a working boat on the ocean surface being replaced with a sunken boat. Also note that the magnitude of sea level rise and falls being distributed across enormous surface area is likely too miniscule to be able to measure (e.g. smaller than instrument error).