NOTE: (This post is to help anyone who has this problem - My watch is now working fine):
I see some other people on reddit having the same problem.
This happened to me 9 times yesterday (despite restarting both watch/phone):
(Would attempt to pair, and sometimes wait 40 mins before failing and then unpairing).
My watch was like this for 5 hours+ yesterday. It would attempt to pair then fail, over and over (despite many restarts for both iPhone/Watch).
(Comment from directly above thread).
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Yeah I've had Apple Watch since AW3 and never experienced this (and have gotten release day Apple Watches before).
I also had issues where when it did pair, no complications were available (so most watch faces were blank) and it was saying Hypertension is not available in my region. And re-my pictures above in the thread I quoted - it refused to transfer any data.
Then ..... it started working - without me doing anything - started communicating, transferring, complications appeared, and music transferred. lol.
Very happy with the AWU3 - battery life is significantly better (my AWU2 had 99% health) based on first night. We'll see how it does today - but the battery burn graph is far more horizontal than my AWU2. It's slightly faster on operations and the screen is visibly easier to read at all angles.