The regulator was doing its job and lowered the voltage. But get rid of it, its better to run your servos on 6v anyway.

If the regulator puts the voltage at 4.8 the voltwatch will still work, just set it to 4.8 and not 6v. But again why put another device inline that can fail when 6 volts is fine? When setting up the radio equipment in your planes, simpler (less connections) is always better.