That looks right to me. You can test it with:
nix-shell \
--packages 'procps.overrideAttrs (a: {
configureFlags = a.configureFlags ++ [ "--enable-watch8bit" ];
})' \
--run 'watch echo ✓'
I’d recommend opening an issue in nixpkgs to add this flag by default. Debian, Arch, and Red Hat already do in their packaging.