Same issue, still present in iOS 27 beta 8.

Using custom progress view or timers in live activities or dynamic island was never possible. It probably worked for you when you tested in simulator or linked to a debugger in Xcode (in this case the app is running in background vs in real life scenario it's suspended after ~10 seconds).

My watch app is launched but handleRemoteNowPlayingActivity() in WKExtensionDelegate is not being called, so I cannot configure the app. Has anyone solved it?