The thinking is that usually, you're wanting to read the threads you're interested in (by watching) that have content you haven't seen rather than browsing all of them or managing them in bulk. The link could be more obvious though.
Ha, people who think like that obviously have a better memory than I do.
This morning I looked at a thread, decided I'd reply a bit later so marked it watched thinking I'd easily find it in watched threads. But no. Ah well...
It should be consistent, e.g. New watched threads as with New posts/recent posts
3. When we click on watched threads. You see by default unread watched threads. How can I make it that it shows by default the complete list (like when we click on "show all watched threads")?