I've listened to all the sounds in SH3 when I was trying out some replacements, and I'm fairly certain 'submarine_electric_exterior.wav' is indeed the sound of the electric engines from outside the sub when using free-cam. So long as you correctly named your new file and put it in the correct folder ..which I'm sure you did, then I cant understand why you wouldn't have heard it in game.
When I was trying out some different aircraft sounds I found that I had to convert 16 bit files to 8 bit in order to hear them in the game...otherwise I got no sound or a ctd. That could just be my system and soundcard however.
Send it here if you like and I'll test it for you.
macstu23@hotmail.com