Forget 2nd, 3rd, even 10th generation, it will always be a watch
Is the iPhone still a phone? I have an iPhone and I hardly ever make phone calls on it. Sure, making phone calls is one of its functions, but I don't think that's the main reason to get an iPhone. And I feel the same way about the watch. Telling time isn't the reason you get a smart watch.
As for analyzing why people return the watch, a mod told us (https://forums.macrumors.com/thread...-because-thread.1894177/page-18#post-21742257) that is off-topic for this thread.