I think what he is saying is he'll replace his beat up Apple Watch 1 using Apple Care with a new refurbished one just before Apple Watch 2 comes out and then sell the new refurbished one on Ebay or something to get top dollar because it is new and then use the money to buy Apple Watch 2.
Great idea actually.
The only problem with that theory. Is we really don't know how much the Apple watch will be worth when the new one comes out.
Let's say it's only worth half what someone paid for, even in mint condition. (Hypothetically) Plus the amount that person spent to purchase AppleCare. Plus the amount to file a claim. Would it really be a good idea at that point to intentionally damage your device to resell it? IMO no, you would actually be losing money.