Watchdog timer stuck in restart loop? (green led flashing)
One of the most obvious issues here is that you are enabling the watchdog timer with a delay of 1S and then you are asking the micro controller to sleep for 2S, printing something and then going back into the loop. This, in theory, should be fine(your wdt should trigger a reboot during the 2 second wait) but I've seen it cause issues.

Additionally some bootloaders(notably the Optiboot bootloader on Uno and newer boards) can have issues with watchdog timers causing the wdt to remain enabled after reset even though the setup loop disables it. To start with - try increasing the wdt time to something greater than 2S(you should be able to do WDTO_8S) and see if the issue persists.

EDIT - The OP is using an Arduino Pro Mini clone. The included bootloader on the Arduino Pro Mini does not support system restarts by the WDT. Essentially, on a device with a bootloader that does not support WDT restarts, the board will restart but the timer / reset will not causing the board to continuously reset on reboot. There are alternative bootloaders for Arduino boards that may resolve this issue. Another solution is to use a different method to reboot the board.