Vice captain Watson was ruled out of the drawn first Test in Brisbane and replaced by Rob Quiney who slotted in at number three and scored nine in his Test debut.
"Shane Watson is making steady progress from his calf injury, but it is too early to determine if he will be fit to come under consideration for selection," selectors chairman John Inverarity said.
Quiney has been retained in the Michael Clarke-captained team along with spinner Nathan Lyon, whose selection in Brisbane shut out paceman Mitchell Starc, who was named 12th man.
The four-Test Starc has been named again for the second Test, however, allowing selectors to opt for an all-out pace attack on Adelaide Oval's traditionally batsman-friendly wicket.
Australia's selection panel, which includes Clarke, raised eyebrows earlier this week by suggesting Watson would only be picked if he were fit enough to bowl, effectively saying his batting did not rank in Australia's top six.
Former Australia captain Ian Chappell labelled the notion "ridiculous".
"If I'm a selector picking the Australia XI and Shane Watson is not in the best six batsmen, I've been watching a different game," he told Australian Associated Press.
Inverarity reiterated the selectors' position on Friday, however, saying if Watson was not fit enough to bowl, he would not be fit enough to bat either.
"He has to be fit to perform," Inverarity told reporters in Perth. "We are hoping he will be able to bowl. But if he is not fit to bowl he would not be fit to run between the wickets and run in the field."
The Adelaide Test begins next Thursday, with the third and final match starting in Perth on November 30.
Australia squad: Michael Clarke (captain), Shane Watson, David Warner, Ed Cowan, Rob Quiney, Ricky Ponting, Mike Hussey, Matthew Wade, Peter Siddle, Ben Hilfenhaus, James Pattinson, Nathan Lyon, Mitchell Starc
- Sports & Recreation
- Shane Watson
- Rob Quiney
- John Inverarity
- Mitchell Starc