This is happening to both my wife and my watches after we upgraded to the new iPhone. SMS texts don't get cleared from the watch when cleared on the phone.
If you get a text on the phone and open to read, it won’t sync as read on the watch. To my knowledge, Apple didn’t allow iCloud sync to work with that particular aspect.
This is happening to both my wife and my watches after we upgraded to the new iPhone. SMS texts don't get cleared from the watch when cleared on the phone.