Examining the given jpeg in Windows Explorer gives no watermark in the thumbnails and a watermark in the preview screen. Further examination of the .jpeg by an exiftool shows (only relevant info showed):
ExifTool Version Number : 9.39
File Name : 5.jpg
File Size : 129 kB
File Type : JPEG
Photoshop Thumbnail : (Binary data 14603 bytes, use -b option to extract)
Thumbnail Offset : 19234
Thumbnail Length : 10749
Thumbnail Image : (Binary data 10749 bytes, use -b option to extract)
So there is a thumbnail embedded in the jpeg (in the exif/meta data) which is used by Windows Explorer (and other software).
When you open this image in Paint and save it as a different file, the thumbnail itself is not in the file anymore and your Windows Explorer thumbnail shows the watermark. (See image)
To answer the question: Yes, A (not the) non-watermarked image can be extracted but will only be 14603 or 10749 bytes in size which is probably of a lot less quality than the original.
The original (5.jpg) and saved in Paint (5b.jpg):
