They can start walking and talking at the very least, which they will when Tidus swings out his wrist with his own SCA attached.

"This thing didn't always talk, did it? I swear I know it didn't let me do anything like that on the train! You tried it?"

He's looked in the direction of the watch since coming onto the island, but nothing more than that. Why would he? Tidus wouldn't want anything to happen to it, especially after what happened when he tried to take it off his first day... but it didn't seem to be useful otherwise.