Except Apple is not Bugatti. Nor does Bugatti share the hood branding with Hermes -- they get a footnote under the license plate. So basically this is like the Ford Explorer Eddie Bauer Edition.
And while the leatherwork may be the entire point of the Watch, Hermes sells watches they design and manufacture as well, for which they have previously designed the exact same bands they are just transplanting onto the Watch, so it's not like they are even earning the co-branding for the thing it's supposed to be about, unlike the Bugatti on which Hermes designed custom leather pieces out of necessity.
Okay, let's say Hermes never came out with the Cape Cod along with the Double Tour, Single Tour, and cuff bands. They designed them from scratch for use on the AW Hermes models. I don't think this would make a difference to the vast majority of customers. Many, including my wife, would just recognize Hermes as a purse manufacturer.