I did visit the hot spring first to start the quest(I did get it) and after going to the spring in larklast and accepting the water spirit i checked back on the hot sping in the shrine and nothin had changed, the quest said it was complete though
Viewing post in Question for future development.
Ahhhh, the hot spring upgrade for the shrine isn't actually available yet for this version, my apologies! (I was thinking about the most recent build for the patreon for this one). If you have Velani accessible via the devout list, then you should be good to go, and the hot spring upgrade will happen automatically once the build with it is live!