OK I'm looking in /libs/ubbthreads.inc.php at line 1080 where we get into the
function handle_watchlist_notifications
In looking at that code, I don't see that it is even caring if the user has their preferences set to have user_email_watchlists set to zero. It is just mailing to them anyway. Can that be right? I thought the purpose of the field user_email_watchlists in the ubbt_user_profile table was to control if the user received emails from the watchlists or not.
For now I am going to comment out the last line:
$mailer->ubbt_mail($result['USER_REAL_EMAIL']);
and see if that works. If so I'll take more long-term action on this function.