The watermark is not showing in product images. I guess Propulsion's CSS is omitting this Woocommerce extension.
Woocommerce watermark extension3 posts from 2 voices
Did you already regenerate your images with http://wordpress.org/extend/plugins/regenerate-thumbnails/
I can't say for sure if the extension will work with the theme or not but my guess would be no. First try regenerating the thumbnails and see if it takes effect at that point.
Regenerating thumbnails fixed the issue.
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