I am seeing the same issue. It started when I turned on the Unlock > Apple Watch option in Security prefs in 1Password. When I saw it, I went, well, don't need that, and turned it back off in there - but the issue has continued.

It looks like this is the same issue as reported in Apple Watch unlocks my Mac but not 1Password.

Hello @Fogmeister and @jeremywsherman! 👋

I'm sorry that you're unable to unlock 1Password using your Apple Watch. I'd like to ask you to create a diagnostics report from your Mac:

Sending Diagnostics Reports (Mac)

Attach the diagnostics to an email message addressed to support+forum@1password.com.

With your email please include:

• A link to this thread: https://1password.community/discussion/147272/1password-needs-to-authenticate-on-my-apple-watch-after-unlocking-with-touchid
• Your forum username: username
• Please do not post your diagnostic report to the forum. This is for your privacy and security.

Please send the entire file.

You should receive an automated reply from our BitBot assistant with a Support ID number. Please post that number here. Thanks very much!

-Dave

Sent. Here's the case number.

MQK-46988-344

Thanks

@Fogmeister

I can see you should have an email reply now, so I'm going to close this thread to avoid duplicate work. :)