What is the range of the Unlock With Watch feature for iOS?
I'm not sure exactly what the distance is, but this Verge article suggests 3 feet:

...your phone isn’t looking for your face with a mask, it’s looking for a face with a mask. With this feature on, when my wife was wearing a mask, she was able to unlock my phone with no problem if I was within three or so feet.

If you're concerned that somebody may unlock your phone without your permission - the same article addresses this:

...whenever your Apple Watch is used to unlock your phone, the watch buzzes you, along with a notification saying your phone has been unlocked and a button to lock it. Pressing that lock button immediately locks your phone and requires a passcode on next unlock.