The fish splits a steam of tiny water droplets at its prey. The startled insect(Pray, which is at the leaf overhanging the water.) is knocked off its perch and into the water below.
I can’t work out the bold part. Could someone please explain it to me.
I think you mean ‘the fish spits’ not ‘the fish splits’ at the begionning of your quote.
The insect is the ‘prey’ not the ‘pray’.
lknocked off its perch = hit off the branch/leaf where it is sitting
and into the water below - and it falls into the water, which is below its perch.