The pink rock is always alongside Cormorant, so before the collision it has zero velocity in all directions, in his frame of reference. After the collision the x-component of its now very slightly deflected velocity vector is close enough to zero in Cormorant’s reference frame to be neglected (remember that it was a very slight deflection), so no relativistic worries there.
What about the green rock? Before the collision it has zero y-velocity in Cormorant’s frame of reference, just as it did in yours. No problem there, but it acquires some y-velocity in the collision, and to quantify this, we have to take account of the fact that this rock is flying at a high speed away from Cormorant in the x-direction, which means that we do now have to worry about relativistic effects. You know about two types of effect: time dilation and length contraction. The easy bit is that length contraction happens only in the direction of relative motion: there is no effect in a perpendicular dimension, so Cormorant’s measurement of the perpendicular distance moved by the green rock is not affected by his speedy retreat, which is effectively in the x-direction. However time is another matter.
Before the collision, both rocks are flying parallel to the x-axis, so each has zero velocity in the y-direction. In turn, this means that neither has any momentum in the y-direction, so in Cormorant's frame of reference - as in yours - the total y-momentum is zero before the collision.
In the collision, the rocks are very slightly deflected, so each now acquires a small velocity component in the y-direction. If Cormorant measures the velocity of the rock he's been tracking (pink) and Shag measures the y-velocity of his rock (green), symmetry tells you that the values they get will be equal but opposite.
However the two seabirds are moving at high velocity relative to one another, so we know that, because he is a moving observer, Cormorant will see less time passing for Shag, as the green rock moves its 1m in the y-direction, than passes for himself, as the pink one does the same. So for Cormorant, the green rock will be moving faster in the y-direction than the pink rock. As the velocities of the two rocks are therefore not equal and opposite, it follows that the sum of the y-momenta, which was zero before the collision, is now decidedly not zero.
The horror! The horror! This means that in Cormorant’s frame of reference, the total y-momentum, appears not to be conserved in this collision. This is an incredibly important result, so we had better analyse it quantitatively: