If it dies due to damage (i.e. water got into it) then, yes - it won't be replaced under warranty.
I'm not making a judgement on whether it's right or wrong, or whether exceptions should be made. But the watertight seal CAN be affected by owner behavior (using the watch in a way that isn't intended). Or of course a seal could have been weak and failed prematurely. How would you (the generic "You," the average consumer) prove the latter? All you can say is "Well, I didn't do that..." which, understandably, Apple would not take as "Proof."
The upshot of it is - if you have an Apple Watch without AppleCare+, and something happens, you are well & truly screwed.