It's switching to web layout view. If you switch back to Page Layout view,
the watermark should be visible again.
In Word, watermarks are for printed documents, while background pictures are
for online viewing. The reason it's switching is that the watermark will not
be visible using a web browser. You would need to insert a background
picture if you want the picture to appear in a web browser. Page Layout tab,
Page Color, Fill Effects, Picture.
PS ...although you can force a background picture (that's not a watermark)
to print by enabling "Print background colors and images" in Word Options -
Display tab.
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