It is seamless, as in you don't have to anything and it will automatically "eventually" connect to cellular. I see the same behavior daily. Initially I used the Airplane mode toggle to make it switch to cellular quicker.
After a couple of days I determined that I could live without connectivity for the short time it took for the watch to confirm that Bluetooth and Wi-Fi were gone and fire up the LTE modem.
My personal opinion is that this behavior is Apple's working as designed to allow the watch to conserve battery. The watch really does not want to turn on the LTE modem. I was grateful that they added the Wi-Fi Toggle to the watch Control panel in watchOS 4.1 so I could force my watch to give up on a very weak Wi-Fi signal and move on to a great LTE signal.
Dave