I unlock my 1Password app on macOS with Apple Watch with no issues. But, there is something that could be better to change, IMHO: when the watch is in sleep mode (same on paired iPhone), trying to unlock the 1Password app on macOS, it vibrates, but I cannot unlock the app via watch, the request does not even appear on the watch and this is absolutely correct, but probably would be better to not have any vibration feedback.
Trying to unlock the MacbookPro, used in this report, while the Apple Watch is in sleep mode, there is no vibration feedback and a warning that explain that the apple watch's status (sleep mode) forbid to use it as key to unlock the device.
1Password Version: 7.8.1.BETA-1 (70801001)
Extension Version: Not Provided
OS Version: macOS 11.2.3 (20D91)
Sync Type: Not Provided