Heat 1 teaspoon oil in a small nonstick skillet over medium-high heat until hot but not smoking. Add sage, and turn with a wooden spoon to coat in oil. Cook until crisp but not brown, about 30 seconds. Immediately transfer with a slotted spoon to paper towels to drain.
Set a fine sieve over a bowl. Working over sieve to catch juices in bowl, cut grapefruit segments from membranes, letting them fall into sieve. Squeeze remaining juice from membranes through sieve into bowl. Coarsely chop or break grapefruit segments into 1-inch pieces.
Stir together 3 tablespoons grapefruit juice, the vinegar, garlic, salt, and pepper. Whisking constantly, add the remaining 2 teaspoons of oil in a slow, steady stream and then whisk until emulsified.
Just before serving, remove garlic from vinaigrette. Toss watercress with grapefruit, olives, and vinaigrette. Garnish with sage leaves.