I cannot tick both Turn Passcode On and Change Passcode in Apple Watch settings

The first (and simplest) thing to try if something isn’t working right is to restart your Apple Watch and its paired iPhone. If necessary (device not responding), try a forced restart. Both methods can be found here:

How to restart your Apple Watch - Apple Support

Restart your iPhone - Apple Support

If that doesn't help, the next steps would be to unpair and pair your watch again and restore from the backup just created. This should result in no loss of data. It deletes all temp and corrupted files and re-indexes the file system.

Unpair and erase your Apple Watch - Apple Support

Set up your Apple Watch - Apple Support

Also see the reply to:

I’m trying to pair an Apple Watch but the… - Apple Community

Are you using a managed device and there are restrictions set up by the administration?

Or do you have restrictions set up in the settings for ScreenTime on your iPhone, that prevent changes for your account information? If yes, disable the restrictions and try again to change the passcode settings.