Hi
After engaging Water Lock, keep rotating the Digital Crown (the round button on the side), causing the coloured circle to grow larger, until your Apple Watch unlocks.
Operation of the Digital Crown can be affected by substances like dust or lotion. If it has stopped operating as expected, then it may help to clean it by following the steps here:
Use the Digital Crown on your Apple Watch - Apple Support
If the issue persists, then your Apple Watch may require service. Contact Apple Support (mail-in service may be available, if required), make a Genius Bar reservation or visit an Apple Authorised Service Provider with a view to arranging for your Apple Watch to be inspected and, if recommended, serviced: