I have found the solution to get debug working all the time.
1. Go To /Users/<username>/Library/Developer/Xcode/ folder
2. There should be 2 folders, "Watch OS DeviceSupport" and "WatchOS DeviceSupport"
Delete "WatchOS DeviceSupport"
3. Delete all older versions of xcode DeveloperPortal* files. Keep the DeveloperPortal 7.0.* files.
4. Open xCode
5. Delete derived data in Windows->Projects
6. Deploy and enjoy debugging 🙂