Looking to 100% this and can not get this to trigger either, even started a whole new game and:
- Did no side quests including armour one
- Went straight through main quests up to Speak to the Apothecarist, after killing Thalla
- Used only Common +0 gear, did not pick up the unique shield in the bear fight arena
- Used exact same dialogue options as shown in this video where it does trigger: https://www.youtube.com/watch?v=HGEJyV4TYE8&t=1691s
- Saved after killing Thalla, reloaded, tried different exit, no joy
- Fast travelled, camped, returned, left again, no joy
I have seen some people say they got it by not talking to watcher, etc. I have tried everything suggested and nothing is triggering it. Hard to want to push on if this will break the 100%!