You can activate the effect of “Gravekeeper’s Watcher” to negate “Graceful Charity”.
You cannot activate “Gravekeeper’s Watcher” during the Damage Step (such as against a “Morphing Jar” that is flipped by an attack).
You cannot activate “Gravekeeper’s Watcher” when a card is discarded as a cost, such as “Magic Jammer”, “Kuriboh”, “Tribute to the Doomed”, “Thunder Dragon”, or “Type Zero Magic Crusher”.
You cannot activate “Gravekeeper’s Watcher” against your opponent’s “Delinquent Duo” because it makes YOU discard, not your opponent.
You cannot activate “Gravekeeper’s Watcher” against the activation of your opponent’s “Mirage of Nightmare” because it is possible that your opponent will not have to discard (for example, by having more than 4 cards in his hand).
When “Morphing Jar” is Flip Summoned, you may chain the effect of “Gravekeeper’s Watcher”, negating the Flip Effect of “Morphing Jar” and destroying it.
Netrep Q&As:
Q: Which card effects can the effect of “Gravekeeper’s Watcher” be used against? Can it be used against “Mirage of Nightmare?”
A: It works against card effects that would require the opponent to discard cards from their own hand, but not if the discard was a cost. “Graceful Charity” and “Card Destruction” come to mind. There really aren’t many options. You cannot use “Gravekeeper’s Watcher” against “Mirage of Nightmare.” Curtis Schultz, 12/07/2003