It does work. You have to press both down at the same time. Just don't hold them down too long or it will cancel the action.Crown + side button press does nothing. Any other ideas?
And not sure if bug or intentional but having screenshots enabled causes the pause shortcut to also take a screenshot. In some of the earlier betas the screenshots were disabled in the workout app so that you could pause without taking screenshot, but there was no way to take a screenshot of the workout app. Now it seems that the only way to use the pause shortcut without taking screenshot is to completely disable the screenshot feature.