Any Compass functionality on WatchOS9.1pb still defunct for me, app shows only red rotating line and watch face element does nothing. Haven’t found any setting that may deny it from working.
If you have a 14 Pro/Pro Max and DON'T have the camera shaking bug, this beta will introduce that. So probably don't update until beta 3 if your camera isn't vibrating/shaking/freaking out.
I can happily confirm from an email from Apple that IOS 16.1 fixes the Image Capture, Photos download error for those that couldn't download any photos to their Macs under IOS 16.