The device is much bigger than a watch and has a home button but no crown. When turned on, it displays Watch apps including Apple’s internal testing software. One of these, the Lisa Tester (with Lisa Simpson’s head as an icon), allows developers to tweak UI elements on the Watch prototype. One of the settings in this app shows Springboard Zoom, a setting that looks like the UI of the original watch.
There is no proof that the device is genuine, but an FCC disclaimer and other details certainly make it look that way. If so, it’s an interesting look at how Apple prototypes and offers a rare look behind the company’s iron curtain-like secrecy.