I am unable to install a watchOS 2 WatchKit app due to an application-identifier entitlement. This happened after turning on App Groups in the Capabilities tab.
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I had this problem with an iPhone app, and fixed it using the following steps.
After I did that, my app rebuilt and launched just fine. Since your app is a watchOS app, I'm not sure that you'll have the same result, but it's worth a try.