Im kleinen Fischerhafen ist immer was los.
My guess is:
There's always something going on in the small fishing harbour.
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In this context yes it means "Something's always going on/happening". In the example "was" is short for "etwas" (something).
"Los" can have other meanings:
Was ist los mit dir? (=What's wrong with you?)
Los geht's (=off we go)
loslassen (=let go)
losfahren (=hit the road)
-los (suffix) (=-less)