To me this duel just confirms that Watson is scum. It's the only way they can get rid of him, plus they know townies will jump to have Red die.
You can tell them this ^
And - If he was scum/indie, he wouldn't have admitted all that, he had 0 reason to. It's not 5D chess either, he can't think of all those by himself.
poem by anonynous Balkan author