After a while and quitting/restarting Xcode while my phone was connected, the message changed to say developer mode was disabled on my watch. Then the developer mode setting magically appeared and I could enable it. Then the Xcode message changed back to waiting for first unlock. Then I had to trust the computer (again - I already did this on the new watch while trying to debug this problem). It still wasn't working until I quit and restarted Xcode yet one more time. Then it finally worked.
Topic:
Developer Tools & Services
SubTopic:
General
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