Activation

Unpairing the Apple Watch will not remove the Activation Lock, if you don't remember your Apple ID password.

If you have the original purchase receipt, contact Apple Support and ask them to disable the Activation Lock.

Follow the steps on this Apple page to do that:

Additional Support - Activation Lock

If she forgot the Apple ID (iCloud) password, enter the Apple (iCloud) ID, and click Forgot Password. See if she can get a Rescue or Notification email option if necessary. Link to contact Apple Support at the end of the 2nd article.

Apple ID - Manage

Apple ID – Forgot Password  *      

Unpairing the watch from the paired iPhone will reset it.

Unpair and erase your Apple Watch - Apple Support