Plympton, a member of the Roaring Forties Club that hosted a post-Grand Final lunch at Melbourne's Sofitel Hotel on Friday, made the suggestion when he was being interviewed on stage.
The former Saints president, who served between 1993 and 2000, said he believed Watters had been sacked two hours earlier.
He said he wasn't sure why the coach of two years had been dumped and was "just talking to Leading Teams".
He later told Fairfax Media he had been joking.
Retired Saint Jason Blake – who was nominated for the AFLPA Madden Medal that was claimed by former Sydney Swan Jude Bolton at the function – was also quizzed about the club's tumultuous time off the field.
He was interviewed on stage and asked what he knew about Plympton's claim.
He said he could "not confirm or deny anything" but had "sent some texts and the silence was deafening".
Both interviews were conducted in a light-hearted manner but the comments still turned heads.
Representatives from the club strongly denied Watters had been sacked when contacted by AFL.com.au.
He is contracted until the end of next season with CEO Michael Nettlefold recently claiming he expected an extension to be finalised ahead of next season.
"You'd like to think we'd be having those discussions before then," Nettlefold told radio station SEN on September 7.
"He'd be keen to get an extension to his contract, we've got a young group coming through and it's something the board will consider in due course.
"There's no issue there.
"It's something that we'll work on over the next couple of months. It really depends on work loads, these things need a fair bit of work."
However, there have been murmurings for a few days that all is not well within the club's football department.
Four club directors have been appointed to review the entire department, including Watters, with head of football Chris Pelchen advising the panel.
Departures have continued with assistant coach Jaymie Graham leaving to return home to Western Australia.
Nettlefold resigned from his post last Friday and will leave the club once an appointment is made to replace him.
Football manager Greg Hutchison was made redundant last month, with his duties redistributed through the football department run by Pelchen.
President Greg Westaway has been replaced by AVJennings boss and club board member Peter Summers, after serving his maximum term of six years.
The presidential transition was made at last month's best and fairest count.
There is also speculation over the future of veteran midfielder Nick Dal Santo, who made a good impression on North Melbourne's leadership group when he met with them last week.
Dal Santo has also met with Essendon in recent times.
Rumours have swirled about Leigh Montagna and where he'll be next year, while it is believed captain Nick Riewoldt has expressed concern over the club wanting to trade a handful of senior players.
Pelchen dismissed speculation about experienced players leaving the club "en masse" as "totally incorrect".
He said there was no chance of Riewoldt leaving and hoped Dal Santo and Montagna would stay.
"We've had conversations with 'Joey' (Montagna) just in the last 24 hours and there's no indication from Joey that he wants to leave our club at all," Pelchen said on Wednesday.
"He's still contracted for next year and I'm not quite sure where that rumour started to be honest."
Twitter: @AFL_JenPhelan
