But that cannot be used on systems where no merchant traffic is expected (as in kafer front lines).
Watchdog missions are kept for several months in kefer space relying on stealth, watching from outer planet's orbits while making no noise (I guess the planets may hide the IR signature), and then relaying the information to other ships to send it to the HQ, or switching places with another ship while the first ship itself goes out with the information.
My theory is the key with Kafer-controlled worlds is that you don't come in close. Not all starships in 2300 are fusion driven, some use MHD or even fission which are a cooler by degrees (MHD being cooler than fission I assume - perhaps they used a lot of MHD ships as the listeners). While closer-in your ship is still going to be blatantly obvious compared to everything else, my theory is that Watchdog heavily depends on the fact that Kafers tend to cluster around the inhabitable planets of a system, which are in the inner system by the rules of solar system generation in 2300. (If there are no inhabitable worlds in a system, the Kafers tend to just pass through it, making Watchdog deployment trivial.)
So the Kafers are in the inner system and you're edging into the outer system. You run your ship in a relatively "cool" state and hope that at that range Kafers overlook your IR signature for millions of distant stars at that range, a comet/asteroid, or something like that (stars are vastly more distant, but they're vastly hotter IR signatures, your ship is vastly closer, but much cooler and there's a lot of distant stars in the background). Now, someone is probably going to say "it's really simple to compare motion parallax between background stars and the ship, they'll find you" - I think the theory in this case is, no it's not at easy as that. Sensor systems are not perfect coverage, automated sensor "clutter cleaning" routines might remove the ship, occupying forces don't have charts containing every significant piece of matter in a solar system (by 2300 those might actually be military secrets or perhaps nobody has does it - it's one of those "you'd think someone would have" topics that come in the news every time a ship collides with something but nobody does due to the time and effort involved and the low chance of collisions), and so on.
More crudely, Watchdog probably used distractions. Either a "raid" (it doesn't actually have to attack just pass through the outer system), or even the Watchdog ships moving in as a cluster. Three ships flying really, really close together so their sensor returns merge together at a distance. Two running "cool" while the third doesn't really care. The third ship is your distraction and it acts like an "armchair civilian master tactician merchant ship captain" who is "cleverly" trying to run the blockade. It comes in and acts like it is going to discharge at some gas giant (dropping off the other two ships), then as the Kafers power up in the inner system it acts like, "oh sh*t they found me!" and the ship zigs off to some other planet and tries to "shut-down" there, then "panics" and bolts right out of the system as the Kafers get near. There's probably enough idiots during the Kafer War who did that seriously that the Kafers probably got used to it.
Once in the system, you drift over to a gas giant with a ring system (ideally) or some planet with a few moons or moonlets use that to shield/hide your IR signature against all the clutter or perhaps deploy a fake asteroid "shell" to put around your ship to evade inspection (assuming that your enemy does not have excruciatingly detailed charts of every moonlet down to the size of a ship, a pretty reasonable assumption in 2300 when there's lots of star systems, so "boring' gas giants are not mapped down to that level unlike Saturn). Of course, you can only hope that you don't get detected and tagged by a Sentinel doing this - Kafers might be dumb a lot of the time, but they're not that dumb.
Personally, while I think they talk extensively of Watchdog'ing Kafer systems, humans did it to each other as well during their wars. Also, the writers mention that during times of high Kafer activity, doing watchdog stuff was practically suicidal, but the intelligence returns were so good they kept doing it. So it's not like slipping in like this was foolproof - it was risky, really risky.