You may say, sure, adding diamonds or gemstones to a watch will invariably increase its value. But please don’t be so absolute, since the intrinsic value of the added materials will augment the value of the watch itself. While in other instances, the watch in its unaltered, all-original condition is worth far more than the material value of the added diamonds, and customizing the watch in any way actually becomes detrimental to its overall value and desirability.
When we talk about the luxury replica watches, there is a big difference between factory diamonds and custom-set diamonds. Factory diamonds are placed in watches by their respective manufacturers during the production process, however custom-set diamonds are installed by a third party at a later point in time, once the watch has already left the factory. 
A huge range in quality and execution exists among the fake watches with custom-set diamonds, since the gemstones could have been added by virtually any entity after the watch was initially manufactured. A world-renowned luxury watch manufacturer is not possibly to use sub-par gems in their own top-of-the-line timepiece; however a local jeweler might very well use economy-class diamonds to meet the needs of a customer with a tight budget. 
Except from the quality, there is still the issue of originality and factory-intended condition that can affect the prices of diamond-set watches. In the same way that a serious collector would rather have an entirely original, completely unpolished, a vintage Rolex Submariner than one that had been fully restored, a diamond-set Rolex is only of additional value to the purist collector if it was the replica Rolex who supplied and set the diamonds.
But sometimes, custom-set diamonds can actually detract from the overall value of a watch. If someone were to alter the original dial and bezel of a vintage Rolex Daytona by setting it with a slew of bad quality, low-carat diamonds, the end result would be a timepiece that was worth meaningfully less than what it was before the modifications had ever taken place. 
Besides, customizing or modifying a new fake Rolex watch will void its factory warranty, and in certain cases, make it ineligible for future factory services to be performed – unless the watch is also restored to its original, manufacturer-intended condition. While this is absolutely irrelevant to some Rolex owners, it can be of significant importance to others, especially if their watch was recently purchased and still has multiple years left on its warranty period.