Apple Watch Unlock problems

The problem was that notifications from the Mac to the watch were no longer being processed. (Notice that this has nothing to do with notifications from the iPhone to the watch; they follow completely different paths.). I could tell that it was a general problem rather than a 1Password problem because I also use my phone to unlock my Mac and to authorize administrative actions, and I wasn't getting those notifications either. Usually when I unlock a Mac with my watch the watch will show a notification post-facto, and when I need to take an administrative action a notification appears on my watch and I approve from there (just like unlocking 1Password). Both the unlock notification and the administrative action notifications had also stopped appearing on my watch.

Once I explained all this to Apple Support, they suggested that I unpair and re-pair the watch with my iPhone. I did so, and that restored all the Mac-driven notifications, including those being sent from 1Password.

One thing I noticed that may be relevant to why this is happening to people now is that Apple improved the Mac-to-watch binding UI in the latest release. Now when you go to turn on unlock-with-watch, Apple forces you to unlock your iPhone as well as your watch so they can be sure to bind not only the watch but the iPhone it's paired with as part of the enclave permissions. (I suspect there was a CVE we haven't heard about yet. :) So I think that the notifications got affected by this for everyone who hadn't unlocked their phone when they first set up Apple Watch unlock.

Hope this helps.