Place the watermelon chunks into a blender and blend until smooth and vibrant red.
Strain the watermelon puree through a fine mesh sieve into a pitcher to remove any pulp for a smoother drink.
Add the tequila, lime juice, honey if using, and chili flakes to the strained watermelon juice.
Muddle the basil leaves in a handful of ice cubes in a mixing glass or small bowl to release their aromatic oils and flavor.
Pour the muddled basil and ice into the pitcher, stirring gently to combine all flavors evenly.
Fill cocktail glasses with ice cubes and strain the watermelon mixture over the ice, filling each glass to the desired level.
Garnish each glass with a few fresh basil leaves and a small slice or wheel of watermelon for a colorful finishing touch.
Serve immediately with a straw, and enjoy the refreshing, layered flavors of this summer cocktail.