eBay expects imperfections to be stated. If a watch needs a new battery, I imagine they would expect this to be mentioned (as I would).
Otherwise how is the buyer to know it's working until they've paid to fit a new battery? A non-working battery could also have leaked corrosive material because of its age. Even attempting to repair this could invalidate eBay's money back guarantee as items have to be returned in the condition supplied, warts and all.
Cases under eBay's money back giuarantee are almost automatically found in the buyers favour anyway. I doubt you would have any chance of winning or appealing this decision if a watch in "very good condition" wasn't working on delivery.