While talking to the Watcher triggers, it was discovered that there were no upgradeable items and that the plague ichor would be used when exiting.
I shared the video and Player Log file, hope it helps.
Google Drive
I’m not sure if this is a bug or a destruction feature, I’ve reported it as a bug for now.
Hey thanks for the bug, it was reported earlier internally and escalated
I went to check if any new dialogue happens with the watcher after getting all the upgrades, but it only brought up the same menu and said no more upgrades are available. When I clicked leave it consumed one of my plague ichor bottles. I also checked my inventory to see if it was simply an animation bug but I had lost one of the bottles.
Talking to the Watcher triggers the consumption of the plague ichor, even if no upgrade is available.