In my case, my Watch even doesn't appear on devices list on Xcode and the developer mode was hidden.
The steps below made the device appear on the list and the "Developer Mode" option appears to on Settings -> Privacy & Security.
1 - Unplug the iPhone from Mac.
2 - Unpair the iPhone on Xcode
3 - Disable developer mode on iPhone
4 - Enable developer mode on iPhone (here, in my case, the devices list already appears the watch)
4.1 - Restart the iPhone....
5 - Enable developer mode on Watch.
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In my case, my Watch even doesn't appear on devices list on Xcode and the developer mode was hidden.
The steps below made the device appear on the list and the "Developer Mode" option appears to on Settings -> Privacy & Security.
Unplug the iPhone from Mac
Unpair the iPhone on Xcode
Disable developer mode on iPhone
Enable developer mode on iPhone (here, in my case, the devices list already appears the watch)
Restart the iPhone....
Enable developer mode on Watch.