I found that netwatch only accepts link-local addresses when no available IPv4 or IPv6 addresses are present. In my test environment, there are two devices, A and B, connected directly via an Ethernet cable. Device A is assigned the IP address 169.254.142.1, and Device B is assigned 169.254.142.17. Since Device B is a multi-interface device and can connect to the internet, netwatch filters out link-local addresses. However, Device A only has a link-local address, which prevents them from communicating.