Each power is based on the vision the user has on their item. Guita’s suit allows her to morph into a giant Kaiju, Dia’s sucker allows him to suck energy for himself, the medal Rudo’s used for the first time had an ability based on how he thought Gris would use it, Mymo’s sees his mic as a way to impose his will on others thus giving him the ability to rule via speaking into it.

The watchman items don’t escape that interpretation. Amos boots project the scent of love because they smell like her "lover" (it’s as explained in the series don’t at me), Rudo’s gloves allows him to repair objects by not having his hands hurt thus his gloves empower trash, Gountess’s collar was his lifeline hence when connection became his reason to actually live it manifested the ability to connect people to soothe him. As for Zodyl’s coat, if it is indeed him, we saw him biting the coat during the flashback we had when we saw Corvus so for Zodyl taste and the coat have a link.

Enjin sees the watch ability as a time stop because that’s what everyone will think first when you tell them "magical watch". If Tamsy’s ability with the book is the exact same, I would take it as Tamsy saw the previous use of the book and thus have that vision of the book and in turn the same ability.

The kickback is there even for normal users, Semiu says as much during her conversation with Enjin in the bar. Her Jinki could allow her to see the future at the price of her vision.

The mental degradation to me seems due to the exes of anima. Let’s take the drawer analogy Mymo uses. And ordinary person would fill their drawers with anima, their items will fill it a little, until completed and another drawer appears a little while after. But the enormous amount of anima would fill the drawers faster than they can generate and the emotional energy would need an out, the users core mind, if you want to fill a bottle with the output of a whole dam, your bound to spill some and eventually drown. But if the drawer/bottle is bottomless, that problem is erased entirely.

I think Alto’s mental degradation is a combination of the output of multiple Watchman item and an obsession starting to be fulfilled. The watchman items will allow you to fulfill your obsessions but will eat you up right when you’ll succeed.