Overwatch 2 and 3 are Bugged.as far as I can tell. Overwatch 1 seems to work properly. When my companion learns the advanced versions, the range that overwatch triggers extends to the crewman's maximum range (which is good), but if an approaching unit is already inside my overwatch 2/3 unit's range when he begins to move forward, my unit's overwatch does not trigger. So in effect, my companion gets WORSE at overwatch when I train him to specialize in that talent. This has been broken ever since the rank 3 Epics were introduced. I have reported it, but it has not been fixed yet.

Chrissy Th'Blesser on Dec 15, 2013 wrote:

You can always work your pirate to make that epic work for you. In one fight I had promoting a quick dieing companion, my privateer had no hit skills up yet and three very angry Ettins to deal with so I had her do several tactical retreats and as the Ettin's chased her down her over watch would then trigger and would give her extra hits at them. You don't have to just stand there and take hits. By being smart you can trigger all kinds of stuff to happen if you play creatively.
Our One Eyed Jack, in this month's newsletter mentions this very helpful blog that teaches you all about how to trigger such chain reactions and will help to give you some very skillful ways to get the epics to work harder for you.

None of that contradicts my original post.

StingyBlazeBurke on Dec 21, 2013 wrote:

You are misinterpreting the way Overwatch works.

Overwatch 3 gives you 3 overwatch uses. Anotherwards, you get to hit up to 3 enemies each full turn.

If you have Overwatch 2, you get to hit up to 2 enemies each turn.

Overwatch 1 gets to only hit 1 enemy per turn.

As far as the range, I believe this simply has to do with your character's max range on all overwatch, whether you have one, two, or three.

If you want to have overwatch at a closer range, give overwatch to a crossbowmen or shorter range companion.

Or you could choose not to tier up Annie and keep her at tier one for minimum ranged overwatch.

I am very sure this is how overwatch works, but if someone in development knows I am wrong, please reply and let us know exactly how overwatch works differently then how I have explained it.

Overwatch 3 does give 3 uses as well as a debuff in accuracy for the enemy whom is hit.

Overwatch 2 also has 3 uses, but the range in which it is activated is increased.

All companions with Overwatch start with a 2 tile range of activation, increasing at the same rate for all companions. ( From what I've seen so far. )

I cannot confirm whether your companion's max range does affect Overwatch 2 & 3's range, I can test to confirm that as well although I have seen my Louis not activating his Overwatch 2 when enemies come within a range of 3 tiles.

Promotions do affect the range for many companions, but do not affect the Overwatch range, such as Bonnie.

I am pretty sure Overwatch 2 has a tile range of 3-5 although as said before, my experience with Louis contradicts the 3 tile minimum.

As Blaze said, I'm hoping someone could post the thread in where a Developer has gone over this epic :D