Can a watermark prevent all copying?

No, and no tool honestly can. A determined, technical person can strip any watermark or DRM from any file. Anyone who promises otherwise is overselling.

What watermarking does is make casual forwarding stop feeling casual — the reviewer's own name is on the copy, and the traceability manifest lets you identify a leaked file. For ARCs, that deterrence is exactly the right level: you want reviewers to read comfortably, not to fight your own advance readers. See What is the traceability manifest?