Wondering if anyone else has found this (re-pairing my watch at the moment...hoping there's a glitch in the software somewhere and not a hardware issue with my watch).
In testing whether the iPhone can actually disable Bluetooth or not (under Settings) I found the watch wasn't failing over to wifi when bluetooth isn't available to communicate with the iPhone. Restarting the devices, no change.
Watch also wasn't showing up in the client list on my wireless access point.
Wondering if anyone else has seen this behaviour since upgrading.