diff --git a/x-pack/plugin/watcher/src/main/java/org/elasticsearch/xpack/watcher/WatcherLifeCycleService.java b/x-pack/plugin/watcher/src/main/java/org/elasticsearch/xpack/watcher/WatcherLifeCycleService.java
index fca29821bfaa4..205e52af39d18 100644
--- a/x-pack/plugin/watcher/src/main/java/org/elasticsearch/xpack/watcher/WatcherLifeCycleService.java
+++ b/x-pack/plugin/watcher/src/main/java/org/elasticsearch/xpack/watcher/WatcherLifeCycleService.java
@@ -5,6 +5,8 @@
  */
 package org.elasticsearch.xpack.watcher;
 
+import org.apache.log4j.LogManager;
+import org.apache.log4j.Logger;
 import org.elasticsearch.cluster.ClusterChangedEvent;
 import org.elasticsearch.cluster.ClusterState;
 import org.elasticsearch.cluster.ClusterStateListener;
@@ -39,6 +41,7 @@ public class WatcherLifeCycleService implements ClusterStateListener {
     private final AtomicReference<List<ShardRouting>> previousShardRoutings = new AtomicReference<>(Collections.emptyList());
     private volatile boolean shutDown = false; // indicates that the node has been shutdown and we should never start watcher after this.
     private volatile WatcherService watcherService;
+    private static final Logger logger = LogManager.getLogger(WatcherLifeCycleService.class);
 
     WatcherLifeCycleService(ClusterService clusterService, WatcherService watcherService) {
         this.watcherService = watcherService;
@@ -147,6 +150,7 @@ public void clusterChanged(ClusterChangedEvent event) {
                     watcherService.start(event.state(), () -> this.state.set(WatcherState.STARTED));
                 }
             } else {
+                logger.debug("Watcher failed validation, will not start watcher and setting state to stopped");
                 clearAllocationIds();
                 this.state.set(WatcherState.STOPPED);
             }
diff --git a/x-pack/plugin/watcher/src/main/java/org/elasticsearch/xpack/watcher/support/WatcherIndexTemplateRegistry.java b/x-pack/plugin/watcher/src/main/java/org/elasticsearch/xpack/watcher/support/WatcherIndexTemplateRegistry.java
index 9f5027f7a0f7a..125da879fbdce 100644
--- a/x-pack/plugin/watcher/src/main/java/org/elasticsearch/xpack/watcher/support/WatcherIndexTemplateRegistry.java
+++ b/x-pack/plugin/watcher/src/main/java/org/elasticsearch/xpack/watcher/support/WatcherIndexTemplateRegistry.java
@@ -79,7 +79,8 @@ protected String getOrigin() {
     }
 
     public static boolean validate(ClusterState state) {
-        return state.getMetaData().getTemplates().containsKey(WatcherIndexTemplateRegistryField.HISTORY_TEMPLATE_NAME) &&
+        return (state.getMetaData().getTemplates().containsKey(WatcherIndexTemplateRegistryField.HISTORY_TEMPLATE_NAME) ||
+                state.getMetaData().getTemplates().containsKey(WatcherIndexTemplateRegistryField.HISTORY_TEMPLATE_NAME_NO_ILM)) &&
             state.getMetaData().getTemplates().containsKey(WatcherIndexTemplateRegistryField.TRIGGERED_TEMPLATE_NAME) &&
             state.getMetaData().getTemplates().containsKey(WatcherIndexTemplateRegistryField.WATCHES_TEMPLATE_NAME);
     }
diff --git a/x-pack/qa/smoke-test-watcher-with-security/build.gradle b/x-pack/qa/smoke-test-watcher-with-security/build.gradle
index 0b622fc446b38..688fda65e6972 100644
--- a/x-pack/qa/smoke-test-watcher-with-security/build.gradle
+++ b/x-pack/qa/smoke-test-watcher-with-security/build.gradle
@@ -25,6 +25,7 @@ integTestCluster {
   keystoreSetting 'xpack.notification.email.account._email.smtp.secure_password', '_passwd'
   setting 'xpack.license.self_generated.type', 'trial'
   extraConfigFile 'roles.yml', 'roles.yml'
+  extraConfigFile 'log4j2.properties', 'custom-log4j2.properties'
   setupCommand 'setupTestAdminUser',
                'bin/elasticsearch-users', 'useradd', 'test_admin', '-p', 'x-pack-test-password', '-r', 'superuser'
   setupCommand 'setupXpackUserForTests',
diff --git a/x-pack/qa/smoke-test-watcher-with-security/custom-log4j2.properties b/x-pack/qa/smoke-test-watcher-with-security/custom-log4j2.properties
new file mode 100644
index 0000000000000..ab9e26544f4b0
--- /dev/null
+++ b/x-pack/qa/smoke-test-watcher-with-security/custom-log4j2.properties
@@ -0,0 +1,183 @@
+
+status = error
+
+# log action execution errors for easier debugging
+logger.action.name = org.elasticsearch.action
+logger.action.level = debug
+
+
+# bump up watcher logging
+logger.watcher.name = org.elasticsearch.xpack.watcher
+logger.watcher.level = debug
+
+logger.core-watcher.name = org.elasticsearch.xpack.core.watcher
+logger.core-watcher.level = debug
+
+appender.console.type = Console
+appender.console.name = console
+appender.console.layout.type = PatternLayout
+appender.console.layout.pattern = [%d{ISO8601}][%-5p][%-25c{1.}] [%node_name]%marker %m%n
+
+######## Server JSON ############################
+appender.rolling.type = RollingFile
+appender.rolling.name = rolling
+appender.rolling.fileName = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}_server.json
+appender.rolling.layout.type = ESJsonLayout
+appender.rolling.layout.type_name = server
+
+appender.rolling.filePattern = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}-%d{yyyy-MM-dd}-%i.json.gz
+appender.rolling.policies.type = Policies
+appender.rolling.policies.time.type = TimeBasedTriggeringPolicy
+appender.rolling.policies.time.interval = 1
+appender.rolling.policies.time.modulate = true
+appender.rolling.policies.size.type = SizeBasedTriggeringPolicy
+appender.rolling.policies.size.size = 128MB
+appender.rolling.strategy.type = DefaultRolloverStrategy
+appender.rolling.strategy.fileIndex = nomax
+appender.rolling.strategy.action.type = Delete
+appender.rolling.strategy.action.basepath = ${sys:es.logs.base_path}
+appender.rolling.strategy.action.condition.type = IfFileName
+appender.rolling.strategy.action.condition.glob = ${sys:es.logs.cluster_name}-*
+appender.rolling.strategy.action.condition.nested_condition.type = IfAccumulatedFileSize
+appender.rolling.strategy.action.condition.nested_condition.exceeds = 2GB
+################################################
+######## Server -  old style pattern ###########
+appender.rolling_old.type = RollingFile
+appender.rolling_old.name = rolling_old
+appender.rolling_old.fileName = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}.log
+appender.rolling_old.layout.type = PatternLayout
+appender.rolling_old.layout.pattern = [%d{ISO8601}][%-5p][%-25c{1.}] [%node_name]%marker %m%n
+
+appender.rolling_old.filePattern = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}-%d{yyyy-MM-dd}-%i.log.gz
+appender.rolling_old.policies.type = Policies
+appender.rolling_old.policies.time.type = TimeBasedTriggeringPolicy
+appender.rolling_old.policies.time.interval = 1
+appender.rolling_old.policies.time.modulate = true
+appender.rolling_old.policies.size.type = SizeBasedTriggeringPolicy
+appender.rolling_old.policies.size.size = 128MB
+appender.rolling_old.strategy.type = DefaultRolloverStrategy
+appender.rolling_old.strategy.fileIndex = nomax
+appender.rolling_old.strategy.action.type = Delete
+appender.rolling_old.strategy.action.basepath = ${sys:es.logs.base_path}
+appender.rolling_old.strategy.action.condition.type = IfFileName
+appender.rolling_old.strategy.action.condition.glob = ${sys:es.logs.cluster_name}-*
+appender.rolling_old.strategy.action.condition.nested_condition.type = IfAccumulatedFileSize
+appender.rolling_old.strategy.action.condition.nested_condition.exceeds = 2GB
+################################################
+
+rootLogger.level = info
+rootLogger.appenderRef.console.ref = console
+rootLogger.appenderRef.rolling.ref = rolling
+rootLogger.appenderRef.rolling_old.ref = rolling_old
+
+######## Deprecation JSON #######################
+appender.deprecation_rolling.type = RollingFile
+appender.deprecation_rolling.name = deprecation_rolling
+appender.deprecation_rolling.fileName = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}_deprecation.json
+appender.deprecation_rolling.layout.type = ESJsonLayout
+appender.deprecation_rolling.layout.type_name = deprecation
+
+appender.deprecation_rolling.filePattern = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}_deprecation-%i.json.gz
+appender.deprecation_rolling.policies.type = Policies
+appender.deprecation_rolling.policies.size.type = SizeBasedTriggeringPolicy
+appender.deprecation_rolling.policies.size.size = 1GB
+appender.deprecation_rolling.strategy.type = DefaultRolloverStrategy
+appender.deprecation_rolling.strategy.max = 4
+#################################################
+######## Deprecation -  old style pattern #######
+appender.deprecation_rolling_old.type = RollingFile
+appender.deprecation_rolling_old.name = deprecation_rolling_old
+appender.deprecation_rolling_old.fileName = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}_deprecation.log
+appender.deprecation_rolling_old.layout.type = PatternLayout
+appender.deprecation_rolling_old.layout.pattern = [%d{ISO8601}][%-5p][%-25c{1.}] [%node_name]%marker %m%n
+
+appender.deprecation_rolling_old.filePattern = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}\
+  _deprecation-%i.log.gz
+appender.deprecation_rolling_old.policies.type = Policies
+appender.deprecation_rolling_old.policies.size.type = SizeBasedTriggeringPolicy
+appender.deprecation_rolling_old.policies.size.size = 1GB
+appender.deprecation_rolling_old.strategy.type = DefaultRolloverStrategy
+appender.deprecation_rolling_old.strategy.max = 4
+#################################################
+logger.deprecation.name = org.elasticsearch.deprecation
+logger.deprecation.level = warn
+logger.deprecation.appenderRef.deprecation_rolling.ref = deprecation_rolling
+logger.deprecation.appenderRef.deprecation_rolling_old.ref = deprecation_rolling_old
+logger.deprecation.additivity = false
+
+######## Search slowlog JSON ####################
+appender.index_search_slowlog_rolling.type = RollingFile
+appender.index_search_slowlog_rolling.name = index_search_slowlog_rolling
+appender.index_search_slowlog_rolling.fileName = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs\
+  .cluster_name}_index_search_slowlog.json
+appender.index_search_slowlog_rolling.layout.type = ESJsonLayout
+appender.index_search_slowlog_rolling.layout.type_name = index_search_slowlog
+
+appender.index_search_slowlog_rolling.filePattern = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs\
+  .cluster_name}_index_search_slowlog-%i.json.gz
+appender.index_search_slowlog_rolling.policies.type = Policies
+appender.index_search_slowlog_rolling.policies.size.type = SizeBasedTriggeringPolicy
+appender.index_search_slowlog_rolling.policies.size.size = 1GB
+appender.index_search_slowlog_rolling.strategy.type = DefaultRolloverStrategy
+appender.index_search_slowlog_rolling.strategy.max = 4
+#################################################
+######## Search slowlog -  old style pattern ####
+appender.index_search_slowlog_rolling_old.type = RollingFile
+appender.index_search_slowlog_rolling_old.name = index_search_slowlog_rolling_old
+appender.index_search_slowlog_rolling_old.fileName = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}\
+  _index_search_slowlog.log
+appender.index_search_slowlog_rolling_old.layout.type = PatternLayout
+appender.index_search_slowlog_rolling_old.layout.pattern = [%d{ISO8601}][%-5p][%-25c{1.}] [%node_name]%marker %m%n
+
+appender.index_search_slowlog_rolling_old.filePattern = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}\
+  _index_search_slowlog-%i.log.gz
+appender.index_search_slowlog_rolling_old.policies.type = Policies
+appender.index_search_slowlog_rolling_old.policies.size.type = SizeBasedTriggeringPolicy
+appender.index_search_slowlog_rolling_old.policies.size.size = 1GB
+appender.index_search_slowlog_rolling_old.strategy.type = DefaultRolloverStrategy
+appender.index_search_slowlog_rolling_old.strategy.max = 4
+#################################################
+logger.index_search_slowlog_rolling.name = index.search.slowlog
+logger.index_search_slowlog_rolling.level = trace
+logger.index_search_slowlog_rolling.appenderRef.index_search_slowlog_rolling.ref = index_search_slowlog_rolling
+logger.index_search_slowlog_rolling.appenderRef.index_search_slowlog_rolling_old.ref = index_search_slowlog_rolling_old
+logger.index_search_slowlog_rolling.additivity = false
+
+######## Indexing slowlog JSON ##################
+appender.index_indexing_slowlog_rolling.type = RollingFile
+appender.index_indexing_slowlog_rolling.name = index_indexing_slowlog_rolling
+appender.index_indexing_slowlog_rolling.fileName = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}\
+  _index_indexing_slowlog.json
+appender.index_indexing_slowlog_rolling.layout.type = ESJsonLayout
+appender.index_indexing_slowlog_rolling.layout.type_name = index_indexing_slowlog
+
+appender.index_indexing_slowlog_rolling.filePattern = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}\
+  _index_indexing_slowlog-%i.json.gz
+appender.index_indexing_slowlog_rolling.policies.type = Policies
+appender.index_indexing_slowlog_rolling.policies.size.type = SizeBasedTriggeringPolicy
+appender.index_indexing_slowlog_rolling.policies.size.size = 1GB
+appender.index_indexing_slowlog_rolling.strategy.type = DefaultRolloverStrategy
+appender.index_indexing_slowlog_rolling.strategy.max = 4
+#################################################
+######## Indexing slowlog -  old style pattern ##
+appender.index_indexing_slowlog_rolling_old.type = RollingFile
+appender.index_indexing_slowlog_rolling_old.name = index_indexing_slowlog_rolling_old
+appender.index_indexing_slowlog_rolling_old.fileName = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}\
+  _index_indexing_slowlog.log
+appender.index_indexing_slowlog_rolling_old.layout.type = PatternLayout
+appender.index_indexing_slowlog_rolling_old.layout.pattern = [%d{ISO8601}][%-5p][%-25c{1.}] [%node_name]%marker %m%n
+
+appender.index_indexing_slowlog_rolling_old.filePattern = ${sys:es.logs.base_path}${sys:file.separator}${sys:es.logs.cluster_name}\
+  _index_indexing_slowlog-%i.log.gz
+appender.index_indexing_slowlog_rolling_old.policies.type = Policies
+appender.index_indexing_slowlog_rolling_old.policies.size.type = SizeBasedTriggeringPolicy
+appender.index_indexing_slowlog_rolling_old.policies.size.size = 1GB
+appender.index_indexing_slowlog_rolling_old.strategy.type = DefaultRolloverStrategy
+appender.index_indexing_slowlog_rolling_old.strategy.max = 4
+#################################################
+
+logger.index_indexing_slowlog.name = index.indexing.slowlog.index
+logger.index_indexing_slowlog.level = trace
+logger.index_indexing_slowlog.appenderRef.index_indexing_slowlog_rolling.ref = index_indexing_slowlog_rolling
+logger.index_indexing_slowlog.appenderRef.index_indexing_slowlog_rolling_old.ref = index_indexing_slowlog_rolling_old
+logger.index_indexing_slowlog.additivity = false
diff --git a/x-pack/qa/smoke-test-watcher-with-security/src/test/java/org/elasticsearch/smoketest/SmokeTestWatcherWithSecurityIT.java b/x-pack/qa/smoke-test-watcher-with-security/src/test/java/org/elasticsearch/smoketest/SmokeTestWatcherWithSecurityIT.java
index 902115e82925d..bec12aaaf8752 100644
--- a/x-pack/qa/smoke-test-watcher-with-security/src/test/java/org/elasticsearch/smoketest/SmokeTestWatcherWithSecurityIT.java
+++ b/x-pack/qa/smoke-test-watcher-with-security/src/test/java/org/elasticsearch/smoketest/SmokeTestWatcherWithSecurityIT.java
@@ -32,7 +32,6 @@
 import static org.hamcrest.Matchers.hasEntry;
 import static org.hamcrest.Matchers.is;
 
-@AwaitsFix(bugUrl = "https://github.com/elastic/elasticsearch/issues/35361")
 public class SmokeTestWatcherWithSecurityIT extends ESRestTestCase {
 
     private static final String TEST_ADMIN_USERNAME = "test_admin";
@@ -83,7 +82,7 @@ public void startWatcher() throws Exception {
         });
 
         assertBusy(() -> {
-            for (String template : XPackRestTestConstants.TEMPLATE_NAMES) {
+            for (String template : XPackRestTestConstants.TEMPLATE_NAMES_NO_ILM) {
                 assertOK(adminClient().performRequest(new Request("HEAD", "_template/" + template)));
             }
         });
diff --git a/x-pack/qa/src/main/java/org/elasticsearch/xpack/test/rest/XPackRestTestConstants.java b/x-pack/qa/src/main/java/org/elasticsearch/xpack/test/rest/XPackRestTestConstants.java
index 1a6a59fbc696b..e0dffaaa38f6b 100644
--- a/x-pack/qa/src/main/java/org/elasticsearch/xpack/test/rest/XPackRestTestConstants.java
+++ b/x-pack/qa/src/main/java/org/elasticsearch/xpack/test/rest/XPackRestTestConstants.java
@@ -11,13 +11,9 @@ public final class XPackRestTestConstants {
 
     // Watcher constants:
     public static final String INDEX_TEMPLATE_VERSION = "9";
-    public static final String HISTORY_TEMPLATE_NAME = ".watch-history-" + INDEX_TEMPLATE_VERSION;
     public static final String HISTORY_TEMPLATE_NAME_NO_ILM = ".watch-history-no-ilm-" + INDEX_TEMPLATE_VERSION;
     public static final String TRIGGERED_TEMPLATE_NAME = ".triggered_watches";
     public static final String WATCHES_TEMPLATE_NAME = ".watches";
-    public static final String[] TEMPLATE_NAMES = new String[] {
-        HISTORY_TEMPLATE_NAME, TRIGGERED_TEMPLATE_NAME, WATCHES_TEMPLATE_NAME
-    };
     public static final String[] TEMPLATE_NAMES_NO_ILM = new String[] {
         HISTORY_TEMPLATE_NAME_NO_ILM, TRIGGERED_TEMPLATE_NAME, WATCHES_TEMPLATE_NAME
     };