I was able to get handoff working under Sierra 10.12.2 with my iPhone and my iWatch is working with Auto-unlock. It activated after I updated my system definition to 17,1 and then updated my iMessage settings with P1grim's tutorial. I'm not sure the system definition did it as much as the changes to iMessage. Previously, it was working but only sporadically. I think when I added all the serials explained in the tutorial, that helped the other issues (but I'm new and only guessing). The watch is able to log into the computer after sleep...says 'unlocking with Apple Watch.' Before, it wouldn't even connect when trying to setup in preferences/security. Only thing I can't yet do is WiFi Calling. When I click the option to upgrade then click 'Enable,' nothing happens. On my MacBook, it authenticates and asks for a code from my iPhone. But calls through the phone are good.