How can ships in Battleship be partitioned into B subsets, each with a capacity C?
The idea is to reduce the bin packing problem to battleship, not the other way around.

The variant of bin packing they use in the paper is to decide if it is possible to partition $n$ numbers into $B$ subsets (the bins) so that the numbers into each subset add to a quantity $C$.

Example:

Input: 

The set $\{2,3,5\}$ , $B=2$ and $C=5$

Possible solution:

Two subsets $1$ and $2$:

$1 = \{2,3\}$

$2 = \{5\}$

This problem can be reduced to battleships  in the following way:

Create a board of width $B \times 2$ and height $S + n$ , where $n$ is the cardinality of the subset we are going to partition and $S$ is the sum of all the elements of the multiset we want to partition.

Then for each pair of columns that belong to each bin, we set the number that the  first column should ammount to $0$ and the other one to $C$. These numbers are the number of pieces of a ship that there should be in each column.

For the rows:
For each number $a_i$ that belongs to the multiset that we want to partition, we have a separator row with a value of $0$ and $a_i$ rows with a value of $1$. These numbers make reference to the number of boat pieces that there should be in each row.
For each row that belongs to a number, we have only a ship piece because we want each of the $a_i$ numbers to be covered by a single ship of that size.

So in one column of each column pair we will have a separator row and a vertical strip of $a_i$ rows of height for each number of the multiset we have to partition. We can cover that strip with a ship or not, but we have to cover enough strips of a column so that the number of ship pieces of that column adds to exactly $C$.

Because a picture is worth a thousand words i made a picture of a solved example board that we obtain by reducing an instance of bin packing to battleship

The instance of bin packing that i'm going to use as an example is:

The set $\{2,3,5\}$.

$B=2$

$C=5$

The shaded squares are squares that are occupied by a boat.



Thanks for bringing my attention to this problem, i didn't know it.

Hope this is helpful.