When you load your watchlist the options to show/hide minor edits, own edits, etc are set according to your preferences, and do not appear in the URL.
If you then chose to e.g. hide your own edits then a parameter &hideOwn=1 is appended to the url, the watchlist reloads and you don't see your own edits. The link "Hide my edits" changes to "Show my edits". This all works properly and as expected.
If you then want to see your own edits again you click the "Show my edits" link and the page reloads, but it doesn't acutally change anything - the url still contains &hideOwn=1 the link still shows "Show my edits" and your edits are still not shown.
Manually editing the parameter to &hideOwn=0 works, as does clicking the "my watchlist" link at the top of the page to reload your default settings.
This happens the same for all the options, regardless of what the initial status is, the links invert the status once and then never again until the url is manually edited or the watchlist is reloaded with default settings. Using multiple options has no effect - each option works only once, regardless of the state of other options or how often they have been used.
I use Firefox 3.0.11 on Kubuntu Jaunty (KDE3 version) - Mozilla/5.0 (X11; U; Linux x86_64; en-US; rv:188.8.131.52) Gecko/2009060309 Ubuntu/9.04 (jaunty) Firefox/3.0.11
I have also tested it with the same results using Konqueror 3.5.10
A friend has confirmed that he experiences the same using Safari on a Mac.