Comparison between watershed and grabcut
Watershed-based segmentation will typically lead to over-segmentation, and is very sensitive to local image noise (e.g. see discussion here). Typically watersheds are pruned/merged by using thresholds on size (area/relief/volume).

I have not had much direct experience of GrabCut, mostly know it from reading  papers. However I can say that it is a more "modern" approach than watersheds (i.e. much more recently developed). Because it is based on global optimization (via graph cuts), it is less sensitive to local image noise, compared to watersheds.