Hi
Activation Lock prevents unauthorised use of Apple Watch if it is lost or stolen. If the previous owner has already followed the steps here to remove Activation Lock:
About Activation Lock on your Apple Watch - Apple Support
But you are being advised by the Watch app that the Apple Watch is still locked by Activation Lock, then it may help if you, as the new owner, try these steps:
- Close the Watch app on your iPhone
- Restart both devices, turning both off together and then restarting your iPhone first:
Try again to set up the watch:
If the Apple Watch remains locked, then ask the previous owner to either accompany you and the watch to a Genius Bar appointment, taking along their original proof of purchase for the watch or ask them to contact Apple Support and seek assistance with removing Activation Lock:
If they are not able or willing to do so, then I suggest that you return the Apple Watch for a refund, as you will not otherwise be able to use the watch. There is no way around this security feature.