A anti-theft feature from Apple available in all iDevices, As Apple Watch doesn't contain that i word so it does not have the Activation lock feature, but recently held WWDC unveiled the Watch OS 2 and it have that that anti-theft feature known as Activation lock.
Activation lock uses an Apple Id to start a new device and then the device relates to the that Apple Id and whenever some reset or reinstall the software so device require that Apple Id and password so the device could be set up otherwise there is no method to bypass it.
And previouly we seen that Users can hard rest Apple Watch and then they can easily pair it to any iPhone and there were no security measure to prevent from thiefs but theif can easily steal one and hard reset it and use it with any iPhone even if there is a password on Apple Watch.
Apple Watch detects your wrist using Wrist-detection and don't show a password while you are wearing it but when you keep it off from your wrist it starts asking for password every time. On youtube the iDownloadblog shows how a thief is able to hard reset Apple Watch without any password and then the thief can pair it with any iPhone later then iPhone 5 running iOS 8.2. Apple has protected iPhone with Activation Lock, means even if you do a hard reset and then when you will turn your iPhone start setting it up then it will ask for the owners Apple ID and Password. But however, Apple has done nothing like this to Apple Watch as it is able to be reseted without any password and can set-up freely. Since Apple has introduced Activation lock from iOS 7 and make it turned on by default we have seen a huge decrease in iPhone thieves and as according to the official reports there is 50% reduction in iPhone thieves in London, 40% in San Francisco, 25% in New York. Apple Watch is Protected with passcode, but not required until you take it off and then a hard reset allow anyone to pair their iPhone. A hard reset can be done by a long press of Contact button on Apple Watch until the power off option appears and when you will Force Touch on it a dialogue box appears which shows the option to erase all contents and settings, and then simply you have to put Apple Watch on charge to reset no password required.
Many others also tried this and this actually works!