The "Watchdog Settings" trap destination in NFA is only going to send Watchdog Trap events to Spectrum, it will not send the Alerts configured under the Admin->Alerts page of NFA, such as Threshold Violations.
To set the Trap destination for this go to Admin->Application settings and set the Trap Destination IP here as well.
You will likely need to import the Reporter.mib file into Spectrum if it has not been done already in order to interpret the traps.
You can find this file on your NFA console in the \CA\NFA\REPORTER\mib directory.