Different people approach watermarking in different ways. I myself don't sell my photos, and I don't mind if folks want to get some personal enjoyment by, say, using a shot as a "desktop" or making a small print. I've had some non-profit organizations also use them with permission on a Web site or one or two other uses, but the images are Web-size, not suitable for even a good quality 8x10 print.
Now, if ever my photos were to have some "commercial value", well, they'd still only be "publicly available" as Web-size/resolution images...
Now, I've never seriously addressed how I would respond if I found that someone(s) was guilty of appropriating a shot of mine for "inappropriate" purposes.
There have been incidents I've been aware of though, Facebook "pages" that have taken other people's work and posted the shots, even removing watermarks, with absolutely no "hint" that the work was not theirs, and these pages are "photography" pages, not just your "common joe" posting a photo because they "love" it. You would think that photographers would know better -- I mean it's one thing to use the Facebook "Share" function, that's common practice and the "artist" is typically acknowledged, but to post an image as if it's "mine", well, that should be a no-no, at least in the photographic/artistic community. The times when we've seen this happen on Facebook, the "owner" of the page gets bombarded by complaints and Facebook gets notified and typically they take the page down.
That being said, there are some watermarks that are actually "minimal" in the "intrusive" effects, in fact sometimes you have to peek a bit to spot them. The idea is to have something there that would discourage someone "taking ownership" without totally spoiling the visual "impact" of the image...