He didn't trust that he would get his refund
That is all fine and well, but think of it from the seller's point of view. You state you don't know what the item is worth, the buyer says they are not worth anything and wants money back but will not return the items.
He already trusted him with both the bitcoins and the watches prior to them being shipped, so why not trust him with both again to get a refund? If he returns the watches and gets no refund then he has a valid complaint.