I rewatched this film shortly after reading 'The Book of EST' (which can be ahem 'found' online), which is a guidebook for the 70s cult Erhard Seminar Training (now known as The Landmark Forum) which is partly derived from Scientology, and was a major influence on Chuck Palahniuk of 'Fight Club' fame.
I think the gold watch story is basically about EST style thinking - bear with me as I explain.
A big, big part of the EST seminar is the notion that most of our actions and decisions are conditioned reflexes to previous events from our lives or of the lives of other people that keep propagating through time - that most of our decisions are the result of historic random accidents piled up on each other and only by concentrating on the present and what really is happening now instead of our interpretations of the past can we free ourselves from reacting inappropriately to circumstances and making irrational decisions, and that we must 'take responsibility' fully for our decisions.
Rewatching 'The Gold Watch' in this light suddenly makes everything make sense. Why does Koons go into such dull detail about the minutiae of the watch's provenance? On a surface level, there's a pretty good ass joke there, but most of the monologue is pointless.
Viewed as a covert 'explanation' for how men pass down traumas and thus keep reprecipitating violence over generations, it becomes grandly eloquent.
Similarly, look at Butch's frightening and irrational spasm at Fabienne when finding out she has left behind his 'sentimentally valued' watch/inter-generational baggage. As Butch realises, there is no present reason why Fabienne would ascribe particular importance to this watch, and, in the present no reason to be aggressive to her or to risk their lives by going back for it… going, like his father, grandfather and grandfather 'to war'.
Butch is an interesting character because throughout the gold watch story he oscillates between conforming to what Scientologists call his 'reactive mind' and being aware that his thoughts and behaviour are not rational.
We are told by the radio commentators that Butch could not fail to realise how savagely he was beating his opponent - that he was in effect subconsciously murdering him intentionally. We even see Butch unnecessarily killing Vincent Vega because of a random toasting of a Pop-Tart.
In fact, the reason I am on this page at all is that I was so overwhelmed with what looked like EST symbolism in Pulp Fiction that I have gone looking for more information on it.
Maybe you'll get war I did on reading 'The Book of EST'. too. :)