Hello,
It would be interesting to see what the listing says. I just see that you could probably have a larger time step, 0.05 s is very small. Are you sure that the problem is not in your use of Paraview, is the vertical velocity really that small?
Another important fact is that there is a keyword to cancel diffusion on dry zones: THRESHOLD FOR VISCOSITY CORRECTION ON TIDAL FLATS, with default value 0.2. Given your very shallow case and if you have no dry zone you should set it to 0 to see the vertical diffusion acting.
With best regards,
Jean-Michel Hervouet