Hello there!
Turning off your passcode will have consequences, like you can't use Apple Pay, and if your device gets stolen, they don't have to guess your passcode to take a look in the watch.
You mentioned that you don't want to use the passcode overtime you use the Apple Watch, to prevent this you can turn on wear detection, to do that go to passcode in settings, and scroll down to the bottom. Make sure wear detection is enabled.
If the box is gray, there are a number of things you can do.
First make sure you are on the latest versions of iOS and WatchOS
1. First turn off passcode on iphone
2. Unpair and then re-pair Apple Watch
3. Restart Apple Watch
If this didn't work, ten you can try to reset your whole Apple Watch.
Hope this helps!