The device is a good deal larger than a Watch and has a home button but no crown. Once turned on, it shows the Watch apps, including Apple’s internal testing software. One of those, the Lisa tester (with Lisa Simpson’s head as an icon), lets developers adjust the UI elements on the prototype Watch. One of the settings within that app shows Springboard Zoom, a setting that resembles the UI on the original Watch.
There’s no proof that the device is genuine, but an FCC disclaimer and other details certainly make it look that way. If so, it’s an interesting glimpse at how Apple builds prototypes, and provides a rare look behind the company’s iron curtain-like secrecy.