I’m not sure why the screen would be off in an hour whereas earlier the AOD was still on after a few hours. I don’t know if there is ML working to determine user habits and if/when they are near the phone. I do know that for me, I set my phone face down when not using — in the morning it is off, but throughout the day the AOD is on when I pick it up. This seems to be a battery saving feature. Maybe the algorithms are different if the user doesn’t set your phone face down? It does make sense that there would be a difference in behavior with charging your Watch vs wearing your Watch and your proximity to the iPhone.
It could just be that the software needs to be a little more finely tuned. This doesn’t necessarily sound like a serious bug — since AOD is a new feature, and there is the potential for it to drain a battery faster, I’m guessing Apple erred on the side of battery preservation and is trying to detect if a person is actually near the iPhone to begin with.
When you are wearing your Watch and you are near your iPhone, is the AOD coming on in all those situations? And is your iPhone always face up? I now set my iPhone face down, so I don’t know if that makes a difference.