Just wasted 3 hours and counting on this. Developing for Apple Watch is turning into a bigger and bigger waste of time with every version of Xcode because certain things are not available in the simulator (like file transfers for some dumb reason), and each build on the physical watch seems to take hours.
My watch shows it is connected to the phone
"Devices & Simulators" in Xcode show both my phone and watch as ready
But the main Xcode window won't change from "Apple Watch (waiting for first unlock)." It randomly seems to work every hour or so after reconnects and restarts.
Hardware:
iPhone 12 Pro Max
Apple Watch Ultra
This has been one of the crappiest, most frustrating developer experiences I've ever had. And I've been developing for the ecosystem since the days before ARC.