Macbook not allowing unlock with Apple Watch

When I am in system preferences and I attempt to turn on unlock with Apple Watch, a message pops up that says i must update before using unlock with Apple Watch. There was a system update last night to Beta 10.12.6. Anyone have this issue or know how to fix it? Turning off the devices and turning them on again doesn't help.

Macbook 12" Early 2015 10.12.6

Apple Watch series 3 GPS+Cellular black stainless steel 38mm