Still happening with beta 2, filed FB10423650 with video captures.

That's a fair point, though it seems odd to still have that function available if it's not, especially if it no-ops silently. I found a good solution though. I had been hoping to change the preferred color scheme because my asset catalog contains dark mode colors that would be best to use on the watch, given that it's usually using a dark background, but I discovered that I could add a watch-specific variant to each color in the asset catalog, and I set up the appropriate color scheme that way.