I understand he was undercover to get closer to Sam and Carly, but the movie didn't reveal anything that showed it was needed, The Decepticons knew the Autobots were still out there, and Sentinel would have revealed more to the Decepticons than Sam would have known. Also, the watch was there to ensure Sam told the truth about the Autobots plan. It would have be awesome if it were another huge reveal, like the Autobots were discussing a plan to stop Sentinel and the Decepticons, not knowing that Soundwave was listening in on them.
The first key to war is keeping an eye on your enemy. even if you don't learn a damn thing... better safe than sorry. Also, it allowed Soundwave to keep an eye on DYLAN and make sure he stayed true to the cause.
Dylan could just as easily kept an eye on her or Sam or anyone for that matter by using Laserbeak. The only reason Soundwave was a car was because Bay had a contract to put that car in the movie. Just like there was no real reason to make Lockdown a lambo in AOE. It was soooo out of place for him to be the lambo. He could have more easily and sensibly have just been one of the Government Vehicels to blend in with them as they hunted other TFs. To be honest, I think lockdown would have for better and made more sense as one of the Rally Fighters.
Ya ever hear the saying girls like cars and money? Well the Mercedes was the perfect bait to ensure that his future hostage Carly was always in his sights
