Thanks for your answer.
The func update(applicationContext: [String: Any]) -> Void { ... } function is my custom function used to update the applicationContext from the watch-side. The intention is to do some action on the iOS app when the applicationContext is updated from the watch.
It was my understanding that this action was supposed to take place on the WCSession object. Is there any other way to achieve this functionality?
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On further testing, I've found out behavior patterns for the following versions
watchos10.2 & actual device, watchos10.2 & simulators -> onAppear is called when a View shows after a fullScreenCover disappears
watchos10.0 & simulator -> onAppear is NOT called when a View shows after a fullScreenCover disappears
watchos9.4 & simulator -> onAppear is NOT called when a View shows after a fullScreenCover disappears
so for me, this issue seems to have appeared on watchos 10.2