For a MacBook Pro mid 2014 macOS High Sierra in the System Report I just want to verify that -Auto Unlock - Supported- is telling me that it is possible for me to set up a Apple Watch and it is not telling me that it is on or setup. Correct?
According to this site:
If you see “Auto Unlock: Supported,” your Mac meets Auto Unlock hardware requirements. If not, you’re out of luck. As a rule of thumb, Mac models manufactured before 2013 cannot use Auto Unlock.
So it looks like it's telling you the Mac supports Auto Unlock. I have a 2015 MPB with Auto Unlock turned on and my system report still says 'Supported'.