Experiencing similar issue (we opened a similar ticket on v5.6.3 about 19m after this one was opened - crazy!) - watching both threads for a solution...
Simulating the watcher, before saving it, seems to trigger fine
Once I SAVE the JSON definition, the "password" element in the JSON is parsed out by the Kibana server as it is performing the save action.
Re-opening the watch and attempting to simulate then produces the error:
Watcher: [parse_exception] password is a required option
This seems to be a "feature" as reported here :
So... irritating messaging? Is there anyway to get a different, more explicit, message 