If the Turn Passcode Off button is not available to you, then passcode restrictions are likely enforced on your iPhone (via a corporate configuration profile, mobile device management or Exchange policy).
Where passcode restrictions are set on a managed iPhone, they also affect Apple Watch. In such cases, it will therefore not be possible to turn off the watch's passcode.
If your iPhone is managed in this way, contact your device administrator for further information and help.
More information:
Setting passcode restrictions for an Apple Watch - Apple Support