Thanks for bringing this up. I was able to reproduce similar (not quite the same) behavior and there is something going on with the tool that we need to investigate and fix. It might be mid-next week before we get to it. In the meantime, try the following:
1. Before running the tool, make sure you make a backup copy of APUNIQUEID table.
2. Make sure that input polygons have their HydroID populated.
3. If the tool run successfully, HydroID for result watershed and DrainID for input polys might be all 0, which will not enable you to relate the output watersheds to the input polys (but at least you will get the output polygons). If you need that connection and if your input polygons are not overlapping, getting the correct IDs is fairly simple to do using out of the box overlay tools.
4. Check APUNIQUEID table. If it does not seem right, replace it with the backup table created in #1.
I will update this conversation once we have a new AH build with the fix for this tool out.