cannot use italic / bold italic font while making watermark

I can confirm this! Installed all Merriweather (Serif) fonts (incl. bold italic and regular italic) via CC app. When assing any of installed italic fonts to watermark LR render default sans serif font. It happens many installed fonts too (tried open sans), not tested all.

Maybe just check that there is a true italic / bold / bold italic font file installed in your computer, for the chosen typeface. 

In many software even if you only have a single font file installed (treated as the "regular" form of that typeface) - faux crudely darkened or sloped text is shown if you choose bold or italic font override.

But if you do have the true and designed (for example) italic variant installed - which can often differ significantly from the regular form, as to letter shapes / spacing - that proper designed font variant is automatically shown.

I have the impression from other prior posts here, that LrC may have recently stopped filling in absent variants with "faux" transforms. Personally I think that is actively a good thing, since the faux effect tends to be typographically very ugly, but the interface does not prevent selecting a missing variant (it probably should prevent that). Thus depending on the particular typeface chosen, you may or may not successfully achieve bold / italic overridden text within the watermarks generated.

AS an example of how this happens, with most common typefaces there will be a XXXX (Regular) that comes with Bold / Italic / Bold Italic designed forms also. But sometimes there may be "XXXX SemiBold" or "XXXX Light" or whatever, as entirely separate typefaces. XXXX Semibold probably does possess a true italic variant, but a Bold variant for XXXX Light, is less to be expected.

Many special display typefaces may offer no variants at all: they are not designed with that in mind.