When creating an NDI source in Watchout, you enter a resolution for it, and it will always be rendered in that resolution. If the NDI input's resolution does not match, the frames will be scaled to the entered resolution before displaying. Watchout will even accept an NDI input that changes resolution along the way.
The same goes for frame rate, Watchout will accept any frame rate from the NDI source, regardless of the rendering frame rate set in Watchout. I would recommend having the frame rate set in Watchout to equal or higher than the NDI source's frame rate. If WO:s frame rate is lower, it will have to skip frames in the NDI stream, and you might experience slightly higher latency.
For smoothest possible playback of NDI streams in WO, frame blending is available, which is quite useful if the NDI source's frame rate is lower, especially if the frame rates are not multiples of each other. For example, if WO is rendering in 60 fps and the NDI source is 25 fps, by using frame blending you will get smooth playback.