Often, simply toggling the feature off and on is enough to force the system to regenerate the connection.
1. On your Mac, go to System Settings > Touch ID & Password (or Login Password).
2. Toggle off the switch to unlock with your Apple Watch.
3. Restart both your Mac and your Apple Watch.
4. Go back to your Mac's Settings and toggle the Apple Watch unlock feature back on.
3. The Definitive Fix: Clearing Keys in Keychain Access
Option 2
1. Turn off the Apple Watch unlock feature in your Mac's System Settings.
2. Open the Keychain Access app (you can find it by pressing Cmd + Space and typing it into Spotlight).
3. In the search bar at the top right, type: Auto Unlock
4. Select and delete all the entries that appear (they will look like Auto Unlock: ...). Don't worry, these are just temporary cache files.
5. Next, search for: AutoUnlock (without a space) and delete those results as well (e.g., com.apple.ids.device-properties.autounlock...).
6. Open Finder, press Cmd + Shift + G (Go to Folder), and paste the following path:
~/Library/Sharing/AutoUnlock
7. Empty the contents of this folder (move the files to the Trash).
8. Restart your Mac.
9. Go back to System Settings and re-enable the Apple Watch unlock feature. You will be prompted to enter your Mac password to set it up from scratch.