How are you inserting the Watermark?
Try it this way.
We are going to insert a Watermark image into the Header, which effectively, does the same as if you use Words options to insert a Watermark (Windows > Design > Watermark. Mac > Design > Watermark or Insert > Watermark, but doing it this way, gives a user more options to move, position, resize, rotate, format etc.

First, d/click in a documents Header to open it up, then, via the Insert tab > Picture tab, navigate to your chosen image and select it by d/clicking.
Via the Layout Options/Format > Wrap Text, opt for Behind Text.
Now move/position/resize/rotate as required, then d/click away from the selected image. The image will ‘dim’ at this point – that’s fine.
Check the Print Preview to see the result (not dimmed).
To edit the watermark further, you must d/click the Header to allow you to select the image/watermark.
D/clicking the image/watermark brings the Format options into play with a variety of options to choose. R/clicking the active image/watermark will also give you options.

Click the image below to see a short video of the above process.
I’ve used Word 2016 on a Windows 10 OS and I appreciate the Mac version(s) can differ slightly in that some options aren’t there to choose or they are in different tabs/menus/places.
I hope it helps you out.