Your Mac was unable to communicate with your Apple Watch

Btw, to fix the issue, you have to

• Clean all Auto Unlock in your key chain
• Delete a couple of Auto Unlock files in the file system

The below is the tip from an answer from apple discussion https://discussions.apple.com/thread/251826134

Steps (follow at your own discretion)

1. Open “Keychain Access”
2. In “View”, enable “Show Invisible Items”
3. Search for “Auto Unlock”
4. You should see a whole bunch of application passwords for “Auto Unlock: XXXX’s …”
5. Select all records and delete (this will reset/disable auto unlock on other Macs if you use multiple Macs)
6. Whilst still in “Keychain Access”, search for “AutoUnlock” (no space)
7. There should be 4 entries for “tlk” “tlk-nonsync” “classA” “classC”
8. Select 4 records and delete (don’t worry if they re-appear, the system repairs this automatically)
9. Open “Finder” and navigate to “~/Library/Sharing/AutoUnlock”
10. There should be two files “ltk.plist” and “pairing-records.plist”
11. Delete both files
12. Open “System Preferences” and try enabling auto unlock. You may need to enable it twice, the first attempt will fail.