When a player who is possessed by the watcher attacks it, the game will kick out the player for having "attacked invalid entity".

This applies to both multiplayer and singleplayer.

Can confirm. Just had it happen to me as well. Playing in Medieval MC FORGE for 1.20, but the exact same process happened. Spawned in, saw me, possessed me, and then I was kicked from my Singleplayer world.

Yes, I think I did have that mod installed.

Can also confirm. Do you perchance have better combat installed ? @Rowan2112 @CyberVonCyberus
I think this bug has something to do with that mod thus the question above

I did some tests, and I can confirm Better Combat seems to be the cause !
It doesn't seem like we're supposed to be able to attack the watcher when in their perspective. I wasn't able to attack, or to use a bow when in their perspective without Better Combat.
With Better Combat installed, I am able to attack in that perspective, and thus the game kicks me out upon hitting the Watcher.
We shouldn't be able to attack with Better Combat installed, I think that is the root of this bug.