I think the fact that:

1) Sr. Put a contract on Watts.
2) Jr. Tried to get him Jammed up
3) Jr. Was going to take him out
4) Sammy fingered him.
5) Gangland printed it.

What more do you need to conclude that Watts went bad.

Maybe he didnt fully rat however, gave them info on Sr. As a bargaining tool to get out from under the jail time.

He obviously didnt testify against anyone.

Thought he could throw the feds a bone.