How to reset my Apple Watch if it was found

Activation Lock is designed to prevent anyone else from using an Apple Watch if it's ever lost or stolen.

About Activation Lock on your Apple Watch - Apple Support

Activation Lock is an anti-theft feature that cannot be bypassed. Only the previous owner can remove the lock by using their Apple ID & password. Apple will not help you find the previous owner. If the previous owner cannot or will not remove the lock, then the watch is useless to you or anyone else. Turn it over to the authorities or dispose of the watch properly.

You simply cannot reset an Apple Watch you found. Nor should you believe you have the right to restart an Apple Watch you found, which isn't yours to begin with.

Do the right thing and turn it over to the authorities so that hopefully, the rightful owner can possibly be reunited with their watch.