You're over thinking it.
When you are looking at the watch, specifically to look at the display, you will hold it towards your face.
It will have a point on the X, Y, and Z axis when you hold it in that position, which if within a range that millions of dollars of R&D will determine the most efficient, the display will turn on. Using the gyroscope you can determine more information than just X, Y, and Z coordinates and use that feedback to determine if conditions warrant turning on the display.
There will be instances in which you can't move your wrist to satisfy the conditions, sure. But you've got a home button.
There will be instances in which you move your arm and it enables, sure. When you move your wrist back it'll turn off.
It's not going to be perfect, but it's got high-end positioning sensors, a few million dollars of R&D, and soon a large customer base to fine tune with to make it pretty close.
Oh, I know you could demonstrate on camera, in a review specific circumstances when this would look like it works amazingly well.
As you say, you could try and make it work by specifying an XYZ axis, so that whenever the watch was around that position it would guess you are looking at it, and turn on.
Problem there is, it will be turning on all day long when you are doing other movements.
In a meeting or a restaurant, arms on the table, is going to be a different XYZ orientation to look at the watch face, then when you are standing up and looking at the watch face. Not to mention laying down.
I'm not saying it's bad. Just that I feel some people's expectations that this is going to work very well are a bit far fetched.
I could suggest this, and perhaps apple may do this.
Leave it up to the user to set.
Apple could have, for example 6 user defined viewing positions you can set up yourself.
So you get your watch, sit at YOUR desk, the way YOU sit, and twist you arm the way YOU twist it, and when YOU are looking at the watch, you could tell it to memorize that orientation.
Then do the same at home, when you are laying on the couch in the evening watching TV, and again, when you are standing up, say waiting for your bus/train.
Again, it will be tricked, but that could be a reasonable idea, as Apple does not know what position you sit/lay at work or at home.
's software lately has such a low quality compared to Samsung's, and Gear S does turn on accidentally sometimes when you're not looking at it, and doesn't turn on sometimes when you are, I wouldn't expect any magic from 
