Even though my watch is unlocked and connected to the phone, im not allowed to turn on unlock with the watch

Your original profile stated you have an iPhone SE. That is why I responded in the way that I did. If you have one with Face ID, then try restarting both your iPhone and Apple Watch and follow the instructions in the Related Article to try and set it up again.

That is because to unlock your iPhone with the Watch, you need to have a device that uses Face ID. The iPhone SE you have in your profile does not qualify. Read the Related Article for more info.