Why is there sand/gravel under clay tile In a toilet room rather than concrete slab?
The floor was probably installed over the main/original slab using a "dry pack" method, wherein a sand and cement mixture is mixed to a stiff (but not wet) packable and slopeable consistency. The flood likely compromised the integrity of the dry-pack.

After careful tile removal, you may be able to use a wet mortar mixture to resurface the original floor. I would, however, worry about moisture underneath.