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.
Full
I found that I had accidentally changed the provisioning profile to have a wildcard in it.
Ie., it went from com.companyname.appnickname to com.companyname.*
I made a new provisioning profile with the full name correctly named, downloaded it, set the Target->build settings->provisioning profile to that new profile, restarted xcode, got a bizarre error from xcode (it seemed to confuse my various app developer logins), restarted xcode again, and it worked!
I didn't want to delete the existing app, because I was trying to test what happens when a user upgraded their app to a newer version, so I had installed the app store version and then run my xcode with the newer version (which acts like 'upgrading' the app without removing any user data).