A few strange things happened over night... No password for login, browser extensions gone?

So, this morning I wake up and get on my Mac, I hit the space bar, of course thinking I'm about to type my password in. It just lets me in the Mac, no password. I made it go to sleep a few times and it kept doing it. Finally after a restart it was fixed... well no big deal then right?

Well, then as I was checking everything out I noticed my Apple Watch wouldn't unlock my Mac, and that the box had been unchecked. If I try to check the box it ask me to, "finish setting up iCloud," and put in my password. Why would it be just NOW asking me that when I've been unlocking my Mac with my watch for months? Why would I now be finishing setting up iCloud?

I didn't put the password in because I don't know if it's a scam that looks real. I read somewhere that you need to have keychain enabled to make the watch work in iCloud, however I have had keychain disabled in iCloud for a long time and I've been using the Watch to get into my Mac since I got it.

So then after that I go to Safari and notice all of my Safari extensions are completely gone. This has never happened before.

Is any of this normal? I want my watch to wake my Mac up again but I don't want to "finish setting up iCloud" if it might be a hacker trying to get me to type in my password. It doesn't make any sense why it would ask me to finish setting up iCloud now.