Okay, so I upped everything to the Beta profile. iPhone, Watch Ultra, MacBook, and Xcode and now it is working just fine! Running my ultra app on my ultra watch as I type this!

Having exact same issue here.

Having the exact same issues here, iPhone 13 Pro Max and Apple Watch ultra. Exact same errors. Have tried exact same solutions. Xcode connects to my S7 watch without issue. Sorry I’m not much help, just wanted to let you know it’s not just you.