iPhone settings: in Face ID & Passcode > 'Unlock with watch' option is not there

I'm using iPhone 13, and just updated to iOS17 in hopes that it would fix this problem (that I had before update). So this is not related to the iOS.

I want to unlock my phone with my Apple Watch; it has been working until recently for some reason. I've followed directions of going to Settings > 'Face ID & Passcode' and scrolled all the way down and have NOT found the option of Unlock with Apple Watch. It's just not there. It's missing.

How can I bring this option back? I want to unlock my phone with my watch. Thanks!