Whether Watson is traded or not is entirely up to Watson IMO. He either buys in or he doesn't. If he doesn't it is too detrimental to a franchise to keep a QB that doesn't want to be there. There is a reason why when Elway, Eli, and Cutler wanted out, they eventually got out. A QB impacts the whole team and you can't have a QB not sold on the team as a leader as it will permeate the locker room.
Further, Watson doesn't have to sit. What are the Texans going to if Watson starts kneeling every Sunday? What are they going to do if he decides it is not worth it to scramble for yards to keep plays alive with his feet. Or if he decides to just throw it away instead of sitting there and taking a hit to deliver the ball. The problem the Texans have is Watson is not playing for a contract so he gets paid no matter what. And his contract is long enough that if he starts doing stuff like this he will get traded for less and still have time to rebuild his value before his next contract.
There simply is no precedent for a QB wanting out with this much guaranteed money left on his deal. The Texans can say whatever they want but in the end they will need Watson to buy in or face the prospect of having to trade him when his value is less because he undermined the franchise. The biggest issue is not if he sits out. The biggest issue is if he plays while having a Randy Moss with the Raiders attitude. If a QB does that, it kills the entire team.