The technology of pulse oximetry was based on resolving the blood flow pulse in a finger tip (or other extremity) with two colors of Infra-red light. They use two led light emitters and two light detectors. They chose the finger because that's a great place to measure arterial blood oxygen as blood pumps thru the capillary bed of the fingertip. Monitoring the pulse waveform and measuring at the peak of the pulse gives the most accurate measurement. Most pulse oximeters display the waveform during use so that the operator can visually see if the blood flow is good, by the shape of the displayed pulse, and if compromised in some way they can re-position the arm etc.
The Apple watch blood oxygen measurement, on the back of the wrist, is not at all optimal to measure SPO2. I'm pretty sure that is why they don't show the waveform as I suspect it may not look like a classic crisp pulse ox waveform from a finger. They take a 15 sec measurement and probably have an algorithm to compensate for the measurement location. All that said, decent job in my opinion, good enough for a personal trend measurement. SPO2 is a "boring" measurement as we are all normally 95% and higher. When it's lower than this, one would want to use a certified device to monitor before administering any form of treatment.