Here is a series I ran across on WatchDog Timers.
- Arduino
- Raspberry Pi
- External Hardware Watchdogs
Faraday
The most thing to note about the watchdog on Arduinos is that there is a bug in the bootloader for the Nano, Pro Mini, and I believe all other ATmega328P and ATmega168 based Arduino AVR Boards other than Uno, that causes an infinite reset loop after a watchdog reset. I'm not talking about this thing you claim happens when "downloading a sketch", which I've never seen. I'm talking about an issue that happens after every watchdog reset. This is a fairly common problem reported here. The solution is to install optiboot (the bootloader used on the Uno), which doesn't have the bug.
The Arduino WatchDog Timer has a Wto of 8 seconds so if you are downloading a new sketch and the old sketch has the WatchDog enabled, then you can get into an infinite reboot sequence.
The correct term is uploading, not downloading.