When you password protect a file by setting Access to Anyone with the passkey, you are adding an additional layer of encryption to your file. It will be encrypted with the passkey that you will set and can only be decrypted on your recipient’s end. These passkeys are unknown to Digify, hence our system won’t be able to process the file and add a watermark on it.
If you wish to apply a watermark to your file, you can instead set Access to:
Anyone with the link, or
Only people I specify