When the ship was abandoned, Watson remained in the water and, instead of trying to save himself, assisted soldiers who could not swim into life rafts. Weakened by his exertions, he was dragged down by the suction of the sinking ship and drowned. His body was never recovered.
For this action, Watson was originally awarded the Army's second-highest decoration, the Distinguished Service Cross. He was the first African American to receive the Distinguished Service Cross in World War II. The award was upgraded to the Medal of Honor in 1997. During a ceremony conducted on January 13 of that year, President Bill Clinton bestowed the Medal of Honor on seven African American veterans of World War II. Only one of the recipients, Vernon J. Baker, was still alive to receive his award in person.
Watson's military awards include the Medal of Honor, Purple Heart, Army Good Conduct Medal, Asiatic-Pacific Campaign Medal, and World War II Victory Medal. Watson had no known next of kin, so his medals are displayed in the U.S. Army Quartermaster Museum in Fort Lee, Virginia.
Several places and structures have been named in Watson's honor, including a field in Fort Benning, Georgia, and, in 1997, the United States Navy ship USNS Watson (T-AKR-310). The Watson is the lead ship of her class of large, medium-speed, roll-on/roll-off (LMSR) ships.