I had a reply through a friend who knows a chap who has written a book on military watches and this was his thoughts!
That’s an interesting Air Ministry Omega watch. I’m confident that, despite its apparent reduced size, it’s a genuine item with a serial number suggesting a production date from 1939.
Interestingly, whilst most of the RAF issue watches that survive today are dated from 1942/3, their design comes about from before the war. At that time I believe the Air Ministry were responsible for the procurement of their own watches and in 1939, l'd imagine that there was a rush order for watches that was either fulfilled and delivered direct or, given the Swiss neutrality, that order might have been held back at Omega. If that was the case, I can only imagine that it was sold into the “Jewellery Trade” at a later date in what on paper was a “Civilian” deal, which resulted in it being delivered to the AM by convoluted means.
The only other possibility, but I think a less likely scenario, is where this watch was in Britain as a civilian timepiece and ended up being handed over for the benefit for the war effort. I have a AM Longines that fits that but my watch does look civilian-military, unlike your Omega, which is just
too military to begin with.