This has been discussed before but this is a thread to summarize the problem: If you backup your previous watch via unpairing, and if the new watch is on an earlier version of WatchOS, upon pairing to the new watch it will not show the recent backups. There is no guidance in the on-screen dialog such as "incompatible backup detected, only showing old ones". I don't see an Apple KB article discussing this. There are various Apple and 3rd-party articles that simply state "unpair to backup, re-pair with new watch and restore backup". Examples:
support.apple.com
appleinsider.com
It is as if nobody writing all that info considered the possibility a brand new watch might be on an older version of WatchOS and backup/restore between old/new watches might not be possible. Worse yet, it doesn't simply fail but only shows older backups. A person not paying attention could easily restore an old backup to their new watch.
I think the required workaround is first unpair from the old watch, pair to new watch, do not attempt to load backup, upgrade the new watch to the latest WatchOS, unpair from that, re-pair to new watch, load recent backup. If that doesn't work, re-pair to old watch, unpair to make yet another backup, then re-pair to new watch and try to load recent backup. However to my knowledge this isn't well documented and even first and second level Apple support techs are not always aware of it.
Of course if you are an experienced Mac user you may know from experience there can be backup/restore limitations between major software versions like a Final Cut Pro library. But many watch/iPhone users are not thinking in terms of databases and WatchOS versions -- they simply expected the *documented* procedure to work.
It would be an improvement if this was better documented, but the product itself should ideally be designed to avoid this. E.g, when it detects you are trying to pair with a new watch having a backlevel WatchOS vs the most recent backup, it should prompt you and do the WatchOS upgrade -- or something like that.
Restore Apple Watch from a backup
Your Apple Watch content backs up automatically to your paired iPhone, and you can restore it from a stored backup.
support.apple.com
Back up your Apple Watch - Apple Support
Learn how your Apple Watch data is backed up and what the backup includes.

How to upgrade to a new Apple Watch | AppleInsider
Upgrading to a new Apple Watch Series 8, or any other Apple Watch, other isn't as easy as just buying one and putting it on. There's not much more involved, but what you do have to do is important to get right, unless you enjoy exasperation.

It is as if nobody writing all that info considered the possibility a brand new watch might be on an older version of WatchOS and backup/restore between old/new watches might not be possible. Worse yet, it doesn't simply fail but only shows older backups. A person not paying attention could easily restore an old backup to their new watch.
I think the required workaround is first unpair from the old watch, pair to new watch, do not attempt to load backup, upgrade the new watch to the latest WatchOS, unpair from that, re-pair to new watch, load recent backup. If that doesn't work, re-pair to old watch, unpair to make yet another backup, then re-pair to new watch and try to load recent backup. However to my knowledge this isn't well documented and even first and second level Apple support techs are not always aware of it.
Of course if you are an experienced Mac user you may know from experience there can be backup/restore limitations between major software versions like a Final Cut Pro library. But many watch/iPhone users are not thinking in terms of databases and WatchOS versions -- they simply expected the *documented* procedure to work.
It would be an improvement if this was better documented, but the product itself should ideally be designed to avoid this. E.g, when it detects you are trying to pair with a new watch having a backlevel WatchOS vs the most recent backup, it should prompt you and do the WatchOS upgrade -- or something like that.