By calling force at a given moment, energy, you are over counting the amount of energy in the system. Force at a given moment isn't energy.
Also note that a great deal of the X amount of energy for each balloon will be used up by the friction of the balloons moving through the water.
The only friction here is coming from you.
You are using semantics to dodge the basic principle of the machine. You state that energy is not force and that five rising balloons does not add more lifting force than one balloon. I will repeat the obvious and then you prone that five rising balloons is the same as one rising balloon.
I'm not talking to everyone, I'm talking to you. Everything you said about ATM's is the same in my diagram. This you cannot deny.
[1] The lifting force of an air bubble (balloon) is equal to the water being displaced.; call this energy [X] This you cannot deny.
[2] In water, an air bubble expands as it rises. This you cannot deny.
[3] The lifting force of multiple balloons in a vertical row, all attached to each other has a lifting force equal to the combined lifting force of all the balloons; call this energy (F)
[4] Energy [X]+[X]+[X]+[X]+[X] = [F]
[5] [F] five (5) times greater than [X] at any one moment in time. This you cannot deny
[6] To maintain this process all you have to add, at any one moment in time is [X] energy to get an output of [F]
You need to do a little bit better than just stating it will not work.It works, the real question is whether the machine produces more energy than is needed to run it.
The basic principle is simple enough. The machine is using the pressure of water and the rising force of air underwater.

-