Watford is doing amazing right now but they haven't utilized the transfer window just yet, if they sell too many good players (specially sarr for example) that means they will drop to championship level anyway, right now they are playing like a relegation level premier league team which is better than championship teams (at least most of them) so at the end of the day they need to keep as many players as possible.
And in case they sell one player because that player wants to and can't keep him, they need to find someone at least as good or even better because new player would have to get used to the team and also the strategy along with his teammates, so it would be difficult to replace a player with same level. It is a very tricky situation and I hope they get out of it easily.
I think the problem with all teams who are relegated is that the money flow becomes worse because salaries are to the EPL standard, and TV payments will no longer come,,, in essense, it is a net total of $100M loss when you do not play in Premier League.
So it is about letting go of people whose salaries cost the most,,, I do not think they have a choice. Leeds learnt that lesson in a very expensive way, and so did many others who got relegated. So Watford will need to be careful here but I think they want to first secure a place for playoff at minimum which is what they are doing. No League Cup distraction now!