Yes. Unpairing it resets it back to a fresh start. When it powers back up you're back to the language select and then you'll have to pair it again to use, so there's no way to access any of the features.
And to add to what chuyn stated. No one can pair an Watch without erasing it. So it is *not possible to access any data that is left on an any Watch anyway.
* Unless Apple has a way using the Lightning connecter.