Ideally, RC and Watchlist on a client wiki would only show Wikidata changes that actually affect the rendered output of a local page. With the current usage tracking infrastructure, we can omit notifications e.g. when only the local label and page title corresponding to an item is used, but a label in a different language, or a statement is changed. However, as soon as any statement is used on the local page, changes to any statement will trigger a watchlist entry.
Since Lua is a full programming language, it is not trivial to track what change would effectively cause the page output to change. We should be able to do better than what we do currently.