Set Passcode Options Greyed-out on Apple Watch

Note this is not a question but a potential solution since I couldn't find this anywhere.

I recently upgraded my Apple Watch but no matter what I tried, the Passcode wasn't being used and the Set Passcode options were greyed out.

Solution: On your iPhone, go to Content & Privacy Restrictions. The options for Passcode Changes and Account Changes must be set to allow to set up a passcode or change it. Once I allowed those two options, the Passcode Changes screen was active and I could set a passcode for my Watch.