Korra does miss the nod, but she does catch the (partially) backfired attack. "Hey, if it works..." she says mostly to herself with a shrug.

And then, there was water. Lots of it. And Raph yelling an idea about fog. That, she could do. Her form was a little rough compared to some waterbending, but it was more about efficiency than anything. Pull up a mass of water, and then shift its state, engulfing the area in a hazy mist, mostly directed at their headless friend.

...hopefully his lack of a head wouldn't backfire against them.