Apple Watch not unlocking M1 MBP

[Rod]

The title is a misnomer because it is now, but immediately after the last multi device update it wasn't. For a couple of days the "Apple Watch is unlocking your Mac" dialogue failed to appear and I was required to use my fingerprint instead. Hardly a big problem, but today I had time so I followed up on it.

First I checked "Use Apple watch to unlock your applications and your Mac" was enabled, it wasn't. If you type "Watch" into the search bar in Settings it will take you straight to Touch ID & Password Settings to check this. So, I switched it ON and was asked for my Admin Password. It stayed ON (unlike some older macOS's) but that didn't fix the problem.

First I ensured that my VPN on my iPhone and MBP were not set to Launch on Startup. VPN's, like 'em or not, can cause communication problems between Apple devices, especially if they are set to different locations. Hand Off is a good example of this.

Next, I turned the MBP, my iPhone and my Apple Watch OFF.
After 10 mins I turned my MBP ON. Once booted and Logged to the MBP I checked "Use Apple watch to unlock your applications and your Mac" was still enabled, it was.
I turned on my iPhone then my Watch.
Once everything was up and running I put my MBP into sleep mode, waited a few minutes, clicked the Trackpad and was greeted with the familiar Haptic feedback on my watch and a message to say Your Mac has been unlocked by your Apple Watch, same on the MBP.

I wondered if this was an issue exclusive to me or a broader issue related to the updates? Either way, ensuring the option is turned on and powering the devices off then on again seems to fix it at least it did for me.

 

[MacInWin]

I have not seen the problem. However, your solution is a good one. The handshake between the Watch, iPhone, iCloud, and the Mac is complex, and uses both WiFi and Bluetooth for verification. If any of the links are out of kilter, it won't unlock. Restarting everything reset all the links.

I don't know if it's going to continue, but it used to be that once a week or so I had to provide my password again to allow the Watch to unlock my Mac. I didn't mind it, as it refreshes my mind with that password and that's a good thing.

 

[Rod]

I suppose the exception for me in this instance was that the "Use Apple watch to unlock your applications and your Mac" option was turned off. First time thats happened to me that I can recall.
As you say, restarting everything resets all the links but not everybody will think of that, turning it back on is not enough in itself, but I learned that a long time ago when the issue was more problematic.