Well, it makes it quick to unlock. (see https://www.youtube.com/watch?v=Zx5v63D-X80
for a video)
The way it is now, it's probably not that secure, other phone unlocking methods (e.g. pattern, pin) are worse when people around you can see what you're typing so easily. In any case I think this type of unlocking method can be made more secure if we really want to.
Ideally, future watches should support NFC communication so we can do a proper cryptographically secure handshake.