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
You must unpair the watch from the old iPhone before you can pair it with a new iPhone. Simply resetting the watch will not work. Here are two ways to unpair your watch if you no longer have the paired iPhone:
- See the 'How to erase your Apple Watch if you don't have your iPhone' section of:
Unpair and erase your Apple Watch - Apple Support
- With a web browser, go to: https://www.iCloud.com and sign in with your Apple ID. Open Find My iPhone and select All Devices (at the top). Then click your Apple Watch, select 'Erase Apple Watch', and select Next until the device is erased. Finally click "X" next to remove your Apple Watch.