Hi
You are describing Activation Lock, which prevents unauthorised use of the Apple Watch if it is lost or stolen. If you unpaired your watch via the Watch app on your iPhone, this should have been removed.
The following steps may help:
Check that you have removed the watch from your iCloud devices:
In a web browser, go to: https://www.icloud.com/ > sign in with your Apple ID > Settings > My Devices > Click on Apple Watch > Click on the "X" > click on Remove.
If this did not remove Activation Lock, also try the following steps:
If you have not yet done so and if the option is available, unpair the watch via the Watch app on your iPhone (even though the watch is no longer paired to it):
- On your iPhone, in the Watch app, go to: My Watch (tab) > tap on the name of the watch (at the top) > tap on the "i" icon next to your watch > if the button is available, tap on Unpair Apple Watch.
Next ask the new owner to try these steps:
On their iPhone: close the Watch app along with all other open apps:
- Double-press on the Home button, swipe up on the app preview.
Restart both devices, turning both off together and then restarting their iPhone first:
Then re-try pairing the watch to their iPhone:
If the watch remains locked, contact Apple Support (you, not the buyer) for assistance, being sure to make clear that you - as the original owner - have been unable to remove Activation Lock from a watch that you have sold: