The waste occurred when the item was manufactured, not when it was sent to you. Given that nobody wants it, creating it was a destruction of the value of the raw materials that went into it. Whether you throw it away or do anything else with it is irrelevant; the value is already destroyed.
Worrying about the fate of that watch-strap is a bit like fishing some food-soaked plastic wrap out of your garbage bin, and then feeling bad about throwing it back into the garbage bin. The plastic became non-recyclable earlier on, when it interacted with the food during packaging. It interacted with the food before you ever bought it. The standalone recovery-value of the plastic wrap was destroyed in the manufacturing facility, and would be destroyed whether or not you chose to buy the item. Just like those cheap watch straps nobody wants would have been manufactured whether or not there was demand for them. (Because there isn't demand for them, and they still clearly are manufactured.)
Only partially. Vendors will buy more to replace sold stock. If it never sells, the manufacturer will never get another order for production, and the total waste is capped at what's already been created.
I find that in AliExpress land, the long tail of stuff being sold (i.e. the stuff outside of the brand-names) was almost always created as a single batch by a process that can’t be replicated (e.g. because the people who made it only came together at that place and time to make that thing), and when that stock is depleted, the individual item is never sold again. If there turns out to be high demand, then another product will be produced that will be similar (sort of a knock-off, but sometimes it’s better rather than worse) but not identical.
One place you’ll run into this approach with higher-ticket items (i.e. not a $0.03 comb) is in the handheld emulation-console market. Some cool little device was created that everyone wants (e.g. the aluminum-alloy RetroGame 350)? Too bad, they can’t make more even if they wanted to.
Worrying about the fate of that watch-strap is a bit like fishing some food-soaked plastic wrap out of your garbage bin, and then feeling bad about throwing it back into the garbage bin. The plastic became non-recyclable earlier on, when it interacted with the food during packaging. It interacted with the food before you ever bought it. The standalone recovery-value of the plastic wrap was destroyed in the manufacturing facility, and would be destroyed whether or not you chose to buy the item. Just like those cheap watch straps nobody wants would have been manufactured whether or not there was demand for them. (Because there isn't demand for them, and they still clearly are manufactured.)