I agree with all of what @uniquelau has said, as well as that watchers should tie in closely with Notifications.
One thing that comes to mind is that in most other apps where I’ve seen watching well implemented, you will be notified about comments around something you are watching, or key changes like assignee or state. Such as “Task A has been moved to ‘in progress’”. I guess if you pretty much duplicated what you guys already have done nicely with entity history, and basically added all of that to the notifications of a “watcher,” you could accomplish this.
And, I think this would also show a need for Index comments in search because you might see something in an entity you were watching in the comments, but then forget exactly what it was. But you can’t find it in search right now.
Hope that was useful, thanks!