Fail to verify if watch dog timer works properly
In the given code, the LED is lit up as soon as the microcontroller starts operating. Thus, even if the watchdog timer were to reset the MCU, the LED would be off for an infinitesimal time, if at all. 

Consider turning the LED off at start up, then after a delay of a few hundred milliseconds or so, turn it on. 

If the MCU resets, it will turn the LED off again at that time.

Also, what is the watchdog time-out defined for your processor of choice? If it is too small to allow for that brief delay, this entire discussion is moot.