Actually, increasing the brightness level won't increase readability in sunlight. The watch has a light sensor and automatically increases brightness when there is more light falling on the screen, but the max brightness is the same no matter which level you have the watch set to. The brightness settings on the watch will only affect the brightness with lower amounts of ambient light.
With running time on battery being such an important issue, it’s not surprising that Apple has implemented a rather aggressive Brightness management strategy. At lower indoor ambient light levels the display’s Brightness (Luminance) is satisfactory. For the 3 level 1/2/3 user Brightness settings for the Apple Watch the display has 15/60/80 nits at 0 lux, which are good for very low light. As the lux level increases the display Brightness then increases at different rates, but all three settings eventually reach a maximum of 482 nits at very high ambient lux light levels, which is impressive for a watch. But for intermediate lux levels it can be iffy: for example, for the highest (3) user setting, the display reaches 203 nits at 500 lux, 203 nits also at 1,000 lux, and 290 nits at 2,000 lux. In some cases you will need to position your wrist into your shadow in order to see the display well. Indoors it’s fine, outdoors it can be iffy like on most mobile displays