If you remove the USB power and hold the button for 10 seconds, it will power off (with USB power applied power-off is not possible). The magic recovery sequence is to get the watch powered off and hooked to its USB cable, but DON'T plug the USB cable into the PC yet. Now, push in the watch's power button, and then insert the USB connector to your PC, and then release the power button. You have to do this sequence within one second! This will put the watch into DFU mode (its display will have a green bar at the bottom of the screen), and you can now reflash it.
Instructions from Sony are here:
Perhaps the watch is not unbrickable, but Sony seems to have done a decent job of setting things up so you can usually recover.