"Lei Shen's life changed forever when he stumbled into a dark chamber below what are now the Mogu'shan Vaults. Legend has it he found an ancient titan keeper guarding a miraculous device known as the Engine of Nalak'sha. No one knows what transpired between the two beings, but Lei Shen later emerged from the site bristling with the power to forge an empire. The keeper's fate -- and his current whereabouts -- remain a mystery."
Given what we now know about MSV and what we see of the watcher's model, the watcher was no doubt defeated. However, it would make sense that the Mogu might have kept him alive, perhaps as a means of extracting information. I imagine repurposing Titan technology isn't the most easy thing in the world if you don't understand it's working.
Supposedly he is the heroic "bonus boss", much like Alg back in Uldar.