If an incoming FaceTime call is received on an iPhone paired to an Apple Watch, the call will ring both on the phone and the Watch. I realise that it's not currently possible to make/receive FaceTime calls on an Apple Watch directly due to the lack of a camera, but if a FaceTime call is answered on an Apple Watch, what happens?
It’s an audio call only.
You can make audio cellular calls, so it stands to reason FaceTime would follow suit.
This article expands on using FaceTime audio on the Apple Watch