The paper could still be watermarked.
However watermarking all paper for all ballots across the country would be impossible to keep secret. If this is true it would logically only affect some locations considered high probability targets of Biden’s bragged about voter fraud machine.
I heard a guy on InfoWars talking about this and it sounds like the “watermark” term is incorrect. What they are really talking about is a unique number/letter code that is being tracked to the person sending it.
And the details are supposedly stored in a blockchain database online where its contents cannot be altered.
This is my interpretation of what the guy said. And it certainly makes sense that the States would print their own. However, maybe the Feds assign a number that must be on each ballot.