In Enoch 15:8-11, God explains that the ghosts of the dead giants will continue to plague and torment humanity until the End of Days:
8. And now, the giants, who are produced from the spirits and flesh, shall be called evil spirits upon the earth, and on the earth shall be their dwelling. 9. Evil spirits have proceeded from their bodies; because they are born from men, ⌈⌈and⌉⌉ from the holy Watchers is their beginning and primal origin; ⌈they shall be evil spirits on earth, and⌉ evil spirits shall they be called. [10. As for the spirits of heaven, in heaven shall be their dwelling, but as for the spirits of the earth which were born upon the earth, on the earth shall be their dwelling.] 11. And the spirits of the giants afflict, oppress, destroy, attack, do battle, and work destruction on the earth, and cause trouble: they take no food, ⌈but nevertheless hunger⌉ and thirst, and cause offences. And these spirits shall rise up against the children of men and against the women, because they have proceeded ⌈from them⌉.
So there you have it. While the Watchers are themselves imprisoned beneath the earth, their kids are angry ghosts who wander the earth causing trouble. Thanks to the popular conflation of the Sons of God and/or Watchers with their children, the Nephilim-Giants, the seemingly contradictory claim that the Nephilim descended from heaven, were imprisoned under the earth, were killed in the Flood, and were currently active on earth can be resolved. It’s not particularly elegant as a solution, though, since Trey Smith’s whole notion (one repeated by ancient alien theorists) is that this continued existence takes the form of demon DNA. There is no textual support for the idea that anything physical is involved in the nebulous half-existence of the giants. The punishment of the Watchers, to be bound in chains beneath the earth, tormented by hellfire, is exactly the same as the punishment of the Greek Titans, similarly chained and bound in Tartarus, also for their misrule over the earth.
Here I think it’s important to recall exactly who the Jewish writers imagined the Giants were. In the Book of Giants, we know exactly who they envisioned, for they are named: Gilgamesh, Humbaba, and the other figures from Mesopotamian mythology. (Again: Ask literal interpreters of ancient texts how Gilgamesh can live before the Flood in Jewish texts but after it in his own Epic.) In a broader sense, the Giants, whom Genesis specifically identified as the heroes of old, were similar to the Greek race of the Heroes, who were also believed to have been giants, part of the widespread hypothesis of degeneration, which held that the earth was running down from a bigger, better original state. Some believe this to be inspired by the discovery of fossil bones of megafauna, misinterpreted as the bones of ancestral giants. It’s an open question, though, whether the bones gave rise to the myth, or whether the myth governed how the bones were interpreted.
Why is this important? This is important because the Mesopotamians and the Greeks and many of the other Near Eastern peoples believed that the spirits of the heroes continued to be potent, powerful, and active within the earth. Gilgamesh, the great hero, achieved cult status and even before the time of the writer of Enoch was worshiped as a god. He survived in Arabic lore as the demon Jiljamish down to the early modern period. More to the point, in the time and place where the Enochian writer was composing, the Near East was littered with shrines associated (rightly or wrongly) with the Greek heroes. The Hellenistic Greeks identified the Phoenician god Melqart with Heracles, and they everywhere found (or founded) shrines to the hero Jason, the so-called Jasonia. At hero shrines, they offered sacrifices to the heroes in return for the help of the heroes in various everyday affairs.
We further know from Deuteronomy 18:11’s prohibition on oracles of the dead and the biblical discussion of the Witch of Endor raising the spirit of Samuel (1 Samuel 28:3-25) that such beliefs also existed among the Jews; indeed, 1 Samuel 28:13 makes the witch say that she sees “Elohim” rising up from the underworld, which could literally mean “gods” or whatever creatures the son of God (the binay Elohim) were originally meant to be before apocalyptic Judaism made them into Fallen Angels.
In this context, it seems to me that the writers of Enoch and Jubilees were continuing the process of diabolizing non-Jewish gods and heroes, the pantheon of paganism, a process that recognized the power of these other beliefs but held them to be false idols and demons. It’s an interesting dichotomy between those who held firmly that the pagan gods were demons in disguise (a tradition carried over into Christianity, where the ghost of Samuel was routinely identified as a demon in disguise) and those who felt that they were imaginary. Not long after the compilation of Jubilees, the translators of the Septuagint altered Isaiah 65:3 to say that the pagans burn incense on brick altars “to demons who do not exist at all.” This goes beyond recognizing but demonizing the power of one’s enemies to instead reject the idea that they had any power at all.
All of this is the long way around saying that there is in fact an interesting story to tell about the development of the Watchers myth, and even the strange punishment their children receive, but that it doesn’t have much to do with canonical Bible beliefs, or DNA. It seems to be the story of how monotheistic believers tried to reconcile themselves to a world where polytheists had temples full of wonders and claimed to command the powers of the dead heroes of old in the underworld. In this regard, the newly-developed myth that the dead giants became evil spirits seemingly serves to explain how mediums and witches could call up the ghosts of the dead, and how pagans can receive boons from sacrifices made to the dead antediluvian giant heroes, like Gilgamesh.