This type of watch was used by the Fleet Air Arm in Fairey Swordfish aircraft during WWII. We learn from the 1941/1942 Admiralty Manual of Navigation that these watches were known as beacon watches and that they were only to be used in aircraft fitted with an R1147 radio receiver.
The carriers were equipped with a revolving beacon that continuously transmitted second pulses, making a full rotation once per minute. The crucial feature of this system was that the beacon emitted a different sounding signal when it was pointing due north. Prior to launch (these planes were catapulted into the air) the observer would tune the radio receiver to the beacon and set the bezel of the watch so that zero on the outer scale and the tip of the second hand align precisely at the time of the northern signal.
When returning to the carrier, the observer on board the aircraft would turn on the radio and listen to the beacon’s signal. The strongest reception would be experienced when the beacon was pointing directly at the aircraft and using the watch, the aircraft’s position relative to its carrier could be found and the pilot given the course to take. The primary benefit was that these slow aircraft could home in on their carrier from up to 100 miles away without sending out radio signals that may betray their position to the enemy.