I have an Apple Watch Series 3 and MacBook Pro 2017. I tried pairing my Apple Watch to my MacBook and it worked, but I can't use it for login. I can only use my Apple Watch to authenticate within apps (ie. in the security tab of system preferences, I can click the lock icon and unlock it with my Apple Watch). I can't use my Apple Watch to unlock the MacBook. Does anyone know how to fix this?
Well I thought I figured it out, but it stopped working shortly after. So after much troubleshooting, I really did figure it out. Wifi has to be enabled on the Apple Watch for the unlock to work.
It's funny that none of the apple support documents say that. I just use bluetooth on my watch, so I tend to keep Wifi off. When I reset my watch, Wifi was automatically turned back on, which would explain why it worked for a while.