This is not a 1Password problem, but I'm wondering what others have experienced. A recently found bug, described here prevents the use of the new 1Password Apple Watch unlock feature.
Apple Watch 6 [Watch OS 7.1]
MacBook Pro (15-inch, 2019) [MacOS Big Sur 11.0.1]
1Password 7 [Version 7.7 (70700016)]
Under "System Preferences" / "Security and Privacy" / "General" tab:
When I check the "Use your Apple Watch to unlock apps and your Mac" I see the message below. I tried the 12 steps and a few other things listed in the thread I linked to, but no go. I take some solace in knowing that 923 people clicked "I'm having the same problem."
1Password Version: Not Provided
Extension Version: Not Provided
OS Version: Not Provided
Sync Type: Not Provided