thats how its supposed to be...
No, it's not. Not all watch steal routines come off like "Paper Balls Over the Head." Some do, but many do not. It depends on what you are trying to acheive.
If you want the rest of the audience to be just as amazed as the spectator whose watch you are satealing, you need to structure your routine to misdirect everyone, not just that one person.
In fact, the one surefire way to guarantee that no one yells, "Hey... he stole your watch" is to make sure that your routine is designed to misdirect all spectators away from the steal... and that you succeed at it.
So the answer to your question is both misdirection and practice.