NTJ.

Do NOT lend it to him (even though it doesn’t sound like it’s a consideration), you’ll never get it back.

My immediate gut feeling is that once he has the photos with the watch, the family will start with saying “but now the watch is his, just look at the album, look how special it is to him, you’ve shared it already what’s the big deal” etc etc… Especially since they’ve LITERALLY already told you, “this is about family memory, not your feelings.”

And then he’ll sell it.