If quiesce is running and timeout is reached, nothing happens.
If quiesce is finished and no unquiesce is called and SC_AGENT_UNQUIESCE_TIMEOUT timeout is reached, unquiesce is called.
Watchdog doesn't do anything.
If you set SC_AGENT_WATCHDOG_ENABLE= Y then SC_AGENT_UNQUIESCE_TIMEOUT will determine the time that agent should wait before running the unquiesce on the config.
This is only to make sure agent doesn’t allow two queisce operations one after the other and if there is something wrong in communication between agent/server the database is brought back to normal state.