u/DevDaNerd0

The game seems to only update your level of encumbrance when you gain/lose weight, such as picking up or dropping an item, or throwing an item/getting it back with the autoreturn perk or just an autoreturn weapon like the Quantum Pick. It should update when you activate/deactivate the watch, logically, but the watch itself does literally nothing because of the previously mentioned "mechanic" unless you forcibly change your weight with it active.