Not a bug. Unless stopped at a breakpoint inside of the function, the local values in the function are out of scope, exactly as the error says.
Values are never considered in scope when a variable is watched within a custom function, even though "watch this value" is available for use.
1. Open Editor (any project)
2. Create new actor blueprint
3. Create custom function
4. create new float variable
5. Create graph shown in attached image in custom function
6. On the set float, RMB and press "watch this value" on float input pin.
6. In Event graph, call the function on tick, compile
7. Press PIE, watch the custom function and observe the value being watched.
Value is considered not in scope. Hoovering over the input pin shows the current value updating, viewing in viewport also shows the value updating as intended.
Value in "watch this value" box updates with the current value of the variable.
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-20846 in the post.