Beware, these passes are not valid on any Avanti West Coast service between Watford Junction and Euston (as these normally stop at Watford Junction to pick up only northbound or set down only towards London).
I'm not sure that the bit about Avanti is true. Avanti is listed on the internal staff travel briefing about interavailability as being valid on their services. I believe it would definitely be valid with a split ticket, i.e. travelling from Milton Keynes, MKC-WFJ ticket, then using staff pass WFJ-EUS, as that fits the description of the
National Rail Conditions of Travel, 14. Using a Combination of Tickets, as the train does not need to call as a part of this requirement, as per 14.3. I know a number of colleagues who have split season tickets at WFJ using Avanti and have never had an issue.
In terms of wishing to alight/join at Watford Junction travelling to/from Euston, as you say, there are no services that are not 'pick up/alight only', however, I think you'll find, practically, speaking to the train manager has ALWAYS allowed me to travel on this route alighting at WFJ. Of course, there is no 'right' for this, and should the TM not allow you, should that stop get cancelled, etc., there is no recourse really.
It's always been a bit of a grey area, and its complicated because it doesn't really make sense for it to be included on the internal staff travel advice if it's not technically ever going to be valid.