Hi, I filed a feedback (FB13195525) and the resolution is "Potential fix identified - For a future OS update". Guess we have to wait a bit, but Apple is definitely on it. Update: I updated to macOS Sonoma RC2 and Simulator performance seems to be normal again.

I solved this problem by providing the NSLocationWhenInUseUsageDescription key in the Info.plist of the iOS app (Additionally to the WatchKit extension). The iOS App never tracks location and therefore it never asks for permission, but it seems like the keys are still necessary.