Hi there davekonopka
It may sound silly, but double-check that the 🌙 crescent moon doesn't appear on your watch face, which would suggest you're in Do Not Disturb or a Focus Mode. The prompt to unlock 1Password with your Apple Watch is sent as a notification so could be suppressed if Do Not Disturb or Focus Mode is turned on.
Failing that, try these steps if you haven't already:
⚠️ These steps must be completed in this exact order, and please don't skip any, especially restarting.
- Click the Apple menu > System Preferences...
- Open the Security & Privacy pane.
- Turn off "Use your Apple Watch to unlock apps and your Mac".
- Shut down your Mac.
- Restart your Apple Watch.
- Start up your Mac again.
- Turn "Use your Apple Watch to unlock apps and your Mac" back on.
- Open and unlock 1Password.
- Click 1Password > Preferences..., then the Security tab.
- Turn on "Unlock with Apple Watch" again.
Give that a try and let me know how it goes. :)
— Grey