Majeed alleged Australian cricketers were the biggest match fixers and was heard, on tapes recorded by the News of the World and played at the hearing, saying he had acted on behalf of Bracken.
He also claimed he had contact with Ricky Ponting's manager.
The claims have been vehemently denied by the camps of both players, with Bracken reportedly considering legal action against Majeed.
Watson said such claims unfairly questioned the characters of players who pride themselves on their competitiveness, and he would rush to defend his honour if his name was in any way tarnished.
'Absolutely it does (question integrity) and it's unbelievably disappointing,' Watson said at a press conference at Newlands on Tuesday.
'There's no doubt that if my name came up in that as well, especially when you know exactly how much you give every time you play and you're only there to get the best out of yourself and perform.
'If your integrity gets questioned there's no doubt you have to do everything you can to make sure you do clear your name because the majority of people who play sport and play cricket, you're only there to get the best out of yourself and performing as well as you can every single game.
'When that's questioned it's really just a huge question on your character and you've got to try and clear your name as soon as you can.'
Watson had a similar experience of dealing with unsubstantiated rumours during the Cricket World Cup in March, when The Press Trust of India printed a claim that he and Brad Haddin were being investigated for spot fixing in an early game of the tournament.
The story was dismissed as ludicrous by the Australian team and the wider cricket community. In fact, Watson and Haddin had been two of world cricket's most outspoken players about the dangers posed by match fixers.
In August 2010 the pair detailed to the media experiences of being approached by illegal bookmakers.
Watson said on Tuesday that even unfounded references to players were extremely damaging for the individual and the sport as a whole.
'They've been very disappointing and pretty shocking really to see these allegations that have come out from this court case that is going on at the moment,' he said.
'I know from my perspective how damaging they really are to the game of cricket but also to the individuals.
'It challenges the integrity of the game we all love so much. People not just in cricket but outside cricket start to question certain things that happen in games.
'In sport, crazy events sometimes do happen. You never want people questioning what exactly is going on so it's very disappointing when these things come out.'