My suggestion is to change this link to "You watch this Thread". This would be the new popup:
You watch this Thread o watch only with notification alert o watch with email alert x unwatch thread
It would merge two existing popups (unwatch, watch) into one while making it much easier to switch to another notification type. For some threads, I want to be notified by mail. The general setting is to watch them by alert only. I would have to then first unwatch the thread, then watch it again with notification type = mail.