The players were originally allowed to train outside for up to five hours each day, but that's now been scrapped after people on two different charter flights to Melbourne tested positive for COVID-19.
But one flight, from Los Angeles which landed on Friday, has led to two positive COVID-19 tests, a letter shared by players Pablo Cuevas and Santiago Gonzalez said.
"All remaining 63 passengers on the flight have been designated close contacts". That relaxation, however, will not be extended to the players who were aboard QR7493 and EY8004.
An email, which has been leaked online, has reportedly been sent to all players on board the flight which touched down in Melbourne from Los Angeles on Friday.
But those players and support staff on the affected flights will now be confined to their rooms for a fortnight - with British number two Watson one of those affected.
American Tennys Sandgren, ranked No. 50, flew to Australia despite a recent positive test.
Twenty-three of those players were on the flight from Abu Dhabi.
Murray, who was reported to be not showing any symptoms of COVID-19, was said to be hopeful he might still be able to play in the tournament.
The 15 charter flights and the early arrivals are all part of Tennis Australia's attempt to have the tournament happen despite a general ban on worldwide arrivals into the country.
Emirates last night announced the suspension of flights to Sydney, Melbourne and Brisbane, creating more problems for those seeking to return to Australia.
In the Los Angeles-origin flight. along with Gonzalez were (but not limited to) two-time Australian Open champion Victoria Azarenka, 2017 US Open champion Sloane Stephens, former World No. 4 men's singles player Kei Nishikori (who missed the US Open past year after testing positive for COVID-19), and former World No. 18 Alison Riske.
Once a negative result has been returned, players can train within a strictly supervised environment for five hours per day.
"Our thoughts are with the two people who tested positive on the flight and we wish them well for their recovery".
Australia has done a relatively good job of containing the coronavirus, with 909 deaths nationally. Tennis officials were not immediately able to comment. Her best result at Melbourne Park has been reaching the second round in 2019.
Given the two new Covid cases, the government ordered every other passenger on board into a hard two week quarantine, scrapping the agreed training periods.