Even without this technology, your fingers will leave a heat mark on the ATM keys long enough for a malicious person to take a picture of it with a thermal camera. Therefore, when I use an ATM machine, I always hold my fingers over a subset of keys to warm them up while waiting for the excruciatingly slow computer in the thing to do its job. That probably sufficiently masks the thermal print left by actually entering my PIN. Furthermore, I have developed a habit of pressing on the keypad frame as if pressing a key on the pad to fool lurkers. That would probably also protect against the smartwatch appraoch. It's rather easy to protect against such attacks, just introduce sufficient noise.
Note that most ATM machines allow pressing random keys while they're not ready for input. You might also want to press random keys during that time.