I am just thinking of contributing a little of my 2 cents, hope this does not spark off unncessary argument. Dickfore is right. The fact is there really is no contribution from the vertically pointed buoyancy in this picture that concerns only the horizontal linear momentum and center of mass response to the internal configuration change (men's motion on the boat).
Lets assume there are 2 large cranes that lower the men slowly down to the boat, the base of the cranes are firmly anchored at the shore and remain stationary. The cranes lower the men until the men barely land on the boat, but the full weight of the men are still supported by the tensions in the ropes attached to the cranes. In other words, there is no force exerted on the boat by the weight of the men yet. Suddenly the ropes are cut and the full weight of the men simply added to the boat. Does the boat move?
Consider the system of men + boat shortly before the ropes are cut. The center of the mass of the system is still well defined actually, and the horizontal position of the COM remain the same all the time while the men were being lowered by the cranes. The only change is the vertical position of the COM of the system, which is lowering along the same vertical trajectory while the men are being lowered. So even after the ropes are cut, the horizontal position of the system COM remains firmly the same along the vertical trajectory. Thus, there is no motivation at all for the system of men and boat COM to move across the wafer.
Now consider the moment the ropes are cut. The full weight of the men are suddenly added vertically to the boat. Due to the assymetry distribution of the weight, the boat will temporarily experience a net torque that rotates the boat + men system about the COM. More water is displaced at the heavy men side and the buoyancy catches up shortly, rocking the boat back to try to restore equilibrium. Such a damped oscillation will probably last a while but eventually equilibrium will be reached, and there will be no net vertical and horizontal motion afterwards.
It is just not possible to induce a permanent motion perpendicular to the gravitational field by putting weight onto a platform, no matter how small the effect it is claimed to be. The fact is, if there is however small an effect, a perpetual motion matchine would have been invented and all energy crisis solved by paying no respect to the momentum and energy conservation law. And there is no reason why such an effect should be small at all, if it exists in the 1st place. Because one could always choose to set up a system that magnifies the effect arbitrarily, and the experment is not even hard to perform. Just place a smooth plateform with a very heavy weight at one end on a surface with low friction (lubricants or ice), and vertically place another heavy weight at the other end of the plateform and see if the system move.
The fact is, this is a simple question that is meant to test the concept of linear momentum conservation and the COM. One should be able to grasp the key point and also make sufficient assumptions to remove non-essential components irrelevant to the points of the question. The only reason I could think of that one would like to take buoyancy into account is to see how much the bow and stern of the boat actually submerged into the water, which could affect water resistance that affect dissipation of the kinetic energy of the system. But if this needs to be taken into account, I suppose the question should also make clear the viscosity, temp and density of the water (sea water has higher buoyancy due to higher density), and also the shape of the boat that makes a difference in the water resistance. And one will then venture into the non-linearity of fluid dynamics, but have to give up shortly since too much details are omitted from the question.