Think of it this way. Say you have a watermark that is 300 x 100
Then you have mediums set to 400 then the watermark would be if set in proportion to the medium which would result in a very large overlay on that picture hense the proportion for the watermark is set from the original.
This is the correct way to do it that I see everywhere. Watermarks sometimes need to be placed with to get the best size for the pictures your using.
The issue I see here is your pictures are very large and your watermark very small so the best thing to do in your case if your pictures are large is to go with a larger watermark
Remember you cant upscale a picture without getting blurry so try a larger watermark and see what happens.