The team management had earlier announced that Watson, pacemen James Pattinson and Mitchell Johnson and batsman Usman Khwaja were dropped for failing to make a presentation on how to improve their personal as well as the team's performance after the heavy defeat in the second Test in Hyderabad.
The Australian team management sought to downplay Watson's unscheduled departure for Sydney.
"He has not left in a huff, his wife is expecting. And that is why he has left for Australia to be by her side. The two things (returning to Australia and being dropped from the team) should not be linked," Australian team's media manager Matt Cenin said. The team management had earlier not made any announcement that Watson would not be available for the entire series keeping in mind his wife's pregnancy.
Watson's sudden departure has also raised speculation about his relationship with captain Michael Clarke amid indication that the skipper was not happy with the attitude of his deputy.