I am new to the game and have read that players can not play with the Adventure Packs of a cycle unless they also have the Deluxe Expansion of the cycle. What mechanic am I missing? If I buy watcher in the water what prevents me from playing the included quest, unless I have Khazadum? Thanks for the clarification.

The APs use cards that only come in the expansions. The APs instructions will tell you how to build the encounter deck and they always use cards from the expansions.

Unless you want ti buy an AP only to get a few player cards.

To elaborate:

The deluxe expansions include 8-10 encounter sets that are used throughout their corresponding Adventure Packs. Each Adventure Pack only comes with 1 encounter set. In the rulesheet of each AP, it instructs you to use the encounter set found in your AP as well as 1-3 encounter sets found in your deluxe expansion.

Right nothing stops you from using the player cards and hero that the AP's have! There is so much to this game and I wish you happy gaming!

Some AP have incredible player cards (Celebrimor's secret, Steward's fear, Foundations of stone... especialy if you play solo)