Create a custom Windows .bat file and add the following code to the file.
@ECHO OFF
setlocal EnableDelayedExpansion
sass %4:%5 -s compressed
Give the file the correct permissions for your system, and reference this newly created .bat file as the Sass Executable within NetBeans. You should now be able to use the native Watch and Compiler option functionality of NetBeans without getting an error, or having to set the compiler options and watch folders within the bat file.