The present study investigates the dynamics of the interface in the presence of a decaying Lamb–Oseen vortex, and four distinct wave patterns are observed: non-breaking waves with small periodic oscillations, plunging breakers, depression breakers, and gravity–capillary waves. The deformation of the interface is induced by a two-dimensional Lamb–Oseen vortex, and the study examines the influence of vortex strength and surface tension on the resulting flow. The wave dynamics are characterized as a function of the Reynolds and Weber numbers, and a phase diagram is presented in terms of (Re, We) to distinguish the different wave patterns. To ensure accurate reconstruction of the interface, the numerical methods used in this study feature a mass and momentum consistent advection method, high-order interpolation schemes, and a block-structured adaptive mesh refinement strategy. The study presents the characteristics of the air cavity entrained at the moment of wave impact for each wave pattern. Furthermore, the results provide insight into the nature of bubble entrainment within a vortex and reveals the bubble entrainment process via a breakup cascade. Meanwhile, it is also shown that the entrainment of bubble results in significant vortex distortion. Overall, this research contributes to enhance our understanding of wave dynamics and the intricate interaction between vortices and interfaces.