Similar issue. MacOS 12.1 Monterey. Xcode Version 13.2.1 (13C100). iPhone 13 Pro Max running iOS 15.2, and Series 6 Apple Nike Watch running WatchOS version 8.3 (19555). From $flutter doctor -v ... the only thing that is not pristine is the one similar error message that others directly using Xcode get:
! Error: Rob's iPhone is busy: preparing the watch for development via Rob's iPhone. Xcode will continue when Rob's iPhone is finished. (code -10)