In debugwire or simulator, the IO Watchdog WDP bits do not set correctly by altering the prescaler drop down. For example changing the oscillator cycles to 512K clears all the WDP bits. Some of the other prescaler values will set some WDP bits, but not generally correctly. The only way to get it to work is to click on the WDP bits directly - setting WDP3 and WDP0 by this method gives the 8s delay AND the drop down prescaler changes correctly to 1024K cycles.
In fact I can neither set the prescaler bits via code - but this is probably not the correct forum for that.
Have just updated to the latest AS6.2_1502.
Using ATMega328p on Arduino Uno Board.