I would like to know if I could add watchers based on the issue type.
Yes, you can do it. You have to use two post-functions.
In the example I set "Ephemeral string 1" with "user1" if issue type is "Bug", "user2" if issue type is "New Feature", etc.
Use post-function Add or remove watchers to add users in field "Ephemeral string 1" as issue watchers:
Once configured, transition will look like this: