Bought a stolen Apple Watch in demo unit

You don't. That is the risk you take when purchasing a device from an unknown seller. It is likely you have been scammed and the seller has now ghosted you. If you do have contact with the seller, get your money back as the device will never be usable.

If you are certain this is a stolen Watch, turn it in to the police. Otherwise you might be charged with receiving stolen property.

So you knew it was stolen ... bought it anyway ... and now expect us to help you??!? Listen to varjak paw. You just admitted to receiving stolen property in a public forum.