In the third stanza of the poem, the speaker considers how "good men" look back on their lives and mourn lost possibilities. As they watch their final achievements conclude, they realize that this "last wave" will ultimately crash on the beach—and therefore ultimately cease to exist.
These men long for more time and believe that if their deeds had not gotten caught up in that final wave, they might have become even more beautiful. These deeds might have "danced" with life in a "green bay."
Metaphorically, this green bay serves as a contrast to the beach, where the waves crash and life ends. The bay is full of life, the green color likely due to algae in the water. The bay holds seaweed, fish, dolphins, crabs, and other marine life. In this bay, the sunlight dances on the water, reflecting life and the hope that the sunlight offers. These men lament lost possibilities that might have come to fruition if they had been given more time to spend in the "green bay" of life, basking in the glittering possibilities of bright sunlight.
Ultimately, these "good men" must ride the "last wave" toward its final destination, and their unrealized "frail deeds" are hopeless. Still, they "rage" against imminent death as they long for what could have been if given more time in the "green bay," where life runs deep and abundantly.