I see They are starting to feel like a club that cannot be beaten in the English Premier League. This has caused their performance to decline slightly in the last few matches. Maybe you understand what I mean, when we feel too strong, we will definitely underestimate the opponent.
I'm not agree with your statement, as LFC fans, they only lost focus for a while, maybe they underestimated Watford because club that they are face is in relegation zone, but I'm sure they aren't think cannot beaten in every match.
In FA they meet strong club, LFC will proven that's they are still on track.
They had CL on their head aswell. They already have the PL in hand (high chances of having it) and with 1:0 down in first leg in CL maybe they wanna make sure they go all out in 2nd. They also rested their key players- Gomez and Robertson. I kinda think Klopp kinda went out easy on Watford and that went unexpected but anyway they just lost the chance to make a mark in the EPL history.
Still Liverpool fans won't forget how close they were on making the mark and the win streak they had this season.