Ive recently had the same issue with my Series 4 after getting it back from my wife after getting a series 8.
would not update after trying to pair saying "not connected to the internet" message
Fix:
Create a 2.4Ghz WIFI network only on your router
Connect your phone to this.
Erase Watch app on iPhone and reinstall
on Watch - Hold Crown and Side button until screen goes black, then release. when Apple logo appears, hold the Side button again for 20 seconds until it asks "Completely erase watch" select this and green tick.
*Hard reset your iPhone (iPhone 12 Pro Max, Tap Volume Up, release, Tap Volume Down, Release, Hold Power Button until phone powers off and when logo appears let go.
Continue to Watch app and re-pair manual mode by entering the code on apple watch
This paired and update then proceeded without error message and watch updated successfully.
hope this helps