The "hold to the camera" thing looks like it's just for show, but it also makes sure the watch is close enough to the phone for pairing to happen. It also provides a little bit of visual feedback. One of those little Apple touches that adds to the feeling you get when you unbox their products.

The iOS pairing procedure for the 3rd gen AppleTV asks you to tap the phone to the ATV to pair it. The tapping doesn't do anything, it's only the proximity that matters.

http://www.imore.com/how-wirelessly-set-3rd-gen-apple-tv-any...