I've heard of toy guns and rockets, but this is a bit over the top
When I was a kid, I had a rocket-shaped bank, a machine gun-shaped water pistol, and I coveted my cousin's inflatable blimp. I never even heard of a toy sub. Much less a "real periscope, firing torpedoes" thingy. This is an ad from a Workbasket Magazine (go figure) from November, 1967. Hence the $6.98 price tag. I love the description: What thrills as they play at hunting sunken treasures in pirate waters and exploring the strange and mysterious bottom of the deep ocean floor!
I assume it was just a plastic hull that sat on your lawn and the rest was up to the imagination, but who knows. But over seven feet long?! Could it have been a pool toy? Nah. Would kids today even know what to do with something like this that doesn't have computer components? Who knows. Few ever even have the chance to discover as much.