So I have a theory.
The Gold Watch, that is, the watch itself, is given to Butch by Christopher Walken. Keep that in mind, of all people, Christopher Walken.
As he's telling the story to young Butch, I couldn't help but notice a discrepancy. . .
Sent to fight the Germans, killed by the Japanese.
May be easy to overlook. You could say, maybe he did a tour in Europe AND the Pacific.
I think Quentin is making a very subtle hint that the gold watch is bull****. The absurdity of the story itself makes it easy enough to call a joke, and it would be fitting of QT style to render everything that happens as a result of the watch completely pointless.
He's too good of a director and writer to overlook something like that in his own work. It's intentional.