it seems to work for me,
when you're in the select list, what time does it have by current location? is that correct?
if you open the maps app and click location, is the dot in the correct place?
if that's not in the right place do other apps like weather know where you are?
you might look at location privacy settings
on the watch,
settings -> privacy -> location services -> Apple Watch faces
you'll need to verify that the main toggle at the top, and in the watch faces section are both on
if other apps are OK, and your privacy settings look to be right, you might need to do an un-pair, re-pair, and restore.
you can use the backup to restore,
it can take a while, and you'll probably just want to leave your watch on the charger. so don't start if you have to leave in 20 minutes.