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Seems like a bug with the Series 3 or an intermittent bug with WatchOS 4. I'm seeing, or I should say hearing, the same thing. :p

The iPhone is definitely supposed to be silent, outside of perhaps a quick wakeup before the Watch and phone talk to each other.
 
Woohoo!!! Continuity bug!!

Ya know, there's something to be said for actually beta testing new hardware as well as software....mind you...Apple does have over 100k employees. They should have hit these race conditions.
 
This is working correctly for me. Possibly a bug dependent on certain settings?

Spoke too soon. Mine just started doing this also. It was working most of the day until now.
 
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Mine only does this if I say 'Hey Siri' not when I press button down.
It is however playing music on my iPhone when I ask Siri to play a song, so I have to keep putting it in aeroplane mode.
 
As a work around you can put your iPhone face down and it will default to only the watch responding.
 
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