There are some off-the-shelf watches that will do what Falk wants if they are pulled out far enough. As such, they are not gaffed. I think that's what Falk was getting at.. But, this effect is generally performed with the gaffed watch, as you can allow the spec to see the time at the beginning, which Falk didn't do, then, put it under a scarf, set the time, and the time will still be pre-determined by the watch. One of the more expensive props would have been more impressive. P&T still understood the method.
As for Kostya, -if- the deck wasn't gaffed, and I still believe it was, it was a wonderful cull.... The only thing that makes me think it wasn't was Teller picking up some of the cards after the effect was over and having a hard look at them back at his chair..