This is actually a homonym of the word "lie". The first meaning is to say something that is not true. Another meaning is- to be in a position when something or a part of your body is resting freely on something. The sentence from the story has the second meaning.
So the sentence "You lie with your feet in the sea." means that "You are sitting on something letting your feet rest freely into the sea/water"
Hope this was easy to understand..^_^