If I see correctly, he was a Navy officer at the beginning, then he retained his navy rank while serving with the Luftwaffe. Kampfgeschwader 26 was largely a torpedo Bomber squadron, I used to have a nice German cross in Gold group to a pilot in the Geschwader... they were mainly over the Med if I recall correctly, hitting ships on the way to North Africa.
I suppose when the North Arfican theater closed and the Geschwader went to Russia ... they no longer needed a Navy officer.
I had another group, a Navy Officer who served as a Luftwaffe Beobachter up in Norway, then at the end of the war transfered to U-Boots...
I met him a couple of times, they used Navy officers as Observers because they could navigate... and they could tell a ship full of good guys from a ship full of bad guys....
I guess that is what your guy did.....