Fully passive flapping-foil energy harvesters offer structural simplicity and require no external actuation, but their self-excited motion and power extraction may be strongly affected by a deformable free surface during near-surface operation. To clarify this influence, a two-dimensional numerical investigation is conducted on a fully passive NACA0015 flapping foil at a Reynolds number of 500,000 and a Froude number of 0.1581. The Volume of Fluid method and an overset-mesh technique are employed to resolve free-surface deformation and foil motion, respectively. The Reynolds number, foil geometry, pitching-axis location, and structural parameters are kept constant, while only the ratio of submergence depth to foil chord length is varied. The energy-harvesting efficiency exhibits a non-monotonic dependence on submergence depth. Among the examined cases, the maximum efficiency of 45.98% is obtained at a submergence-depth-to-chord ratio of 2.8, representing an improvement of approximately 8.16% over the unconfined baseline efficiency of 42.51%. When this ratio is 1.8 or less, strong free-surface deformation and wave radiation disrupt wake coherence and load–motion phase coordination, producing negative heaving-power intervals and substantially suppressing the positive pitching-power contribution. When the ratio reaches 3.5 or greater, the free-surface influence becomes weak and the efficiency approaches the unconfined baseline. The dominant Strouhal number of the heaving and pitching motions remains approximately 0.1, while pressure cross-correlation analysis shows that free-surface proximity attenuates pressure-fluctuation coherence without altering the leading-edge-vortex-governed propagation mechanism. These results demonstrate that moderate free-surface interaction can enhance energy extraction, whereas excessive interface proximity causes pronounced performance deterioration, providing a preliminary reference for selecting the deployment depth of fully passive flapping-foil energy harvesters.