the quest no longer points to the area where the treasure chest is hidden, in the lake.
I had to look it up on youtube, because the actual pointer is showing velen as the destination, WITHOUT a specific end piont.
Quest still solved by grabbing chest which is in the water nearby the dead horse.

I hit the same issue, though I think it may have been bugged in 1.10 as well.

Yep, same here, although in my case its shoving "Novigrad" as the destination...

Have this bug as well.

I had this bug as well, but like the OP I looked up the location and was able to find the chest and complete the quest. My marker was in Novigrad as well.