I haven’t had any problems running WatchOS 8.x with iOS 16. There have been a few times where notifications would not come to my watch randomly. It would either fix itself or a reboot of the phone would do it.
I don’t know if its an incompatibility or just an iOS 16 bug. Other than that its been perfect.
I hear watch OS 9 is stable, but I haven’t installed it because I don’t really use my watch for anything other than the time, date, and viewing notifications therefore battery life is more important than running a beta on it.