Just ran another test. Same pitch-black closet. Both S4 and S5 on same wrist. S5 with AOD turned off. And again, this is talking all/only about the 'wake' mode, not the stand-by/AOD mode of the 5.
With the light in the closet on, 'woke' both watches and held them under the bulb. Turned off the light and both screens were at max brightness. **** near blinding! Couldn't tell the difference. Kept spinning the crowns upwards to indicate I was interacting with the watch but without causing anything on the screen to actually change. The S4 remained blindingly bright. The S5 started to creep down in brightness after a couple of seconds, even when interacting with it.
Left them alone for a few more seconds (but not enough to 'sleep') and eventually both screens started to adjust to the dark environment again. Sure enough, the S5 kept getting darker past where the S4 leveled off.
Covered the watch faces to 'make them sleep', then tapped them to wake them back up. Both were substantially dimmer than before, but even here, the S5 was dimmer than the S4.
So... thanks to the 'under-the-bulb' test that cranked both screens up to 'blinding', this proves it isn't a hardware issue. It's software. Apple went overboard on the ambient-light-sensor-triggered adjustments of brightness, then didn't give users a way to counter that.
Like others have said, I would *happily* give up some battery life to get better brightness, and as the watch owner/user, I should have that option.
Apple, are you listening? You are turning off your biggest supporters/fans here. The repeat buyers. The ones who always upgrade, happily spending $800 for a cellular 44 in stainless, even when it's the exact same processor as the S4, just an always-on-display and a compass and a little more memory that I'm not using anyway. That was still worth it to me.
But taking away brightness, making it less-usable to me? That's the deal-breaker.
You should have at least made it so disabling AOD would *match* the S4 since that was removing the biggest battery drain that I'm sure inspired the change.
While I want to wait for a software fix, the fact you are saying it's working 'as designed' isn't encouraging that it ever will be because you can't address a problem until you admit you have one. So unfortunately, my new S5 has to go back.
That said, I do applaud you for extending my return window past 30 days as you did today. At least you proved you do still value your customer's experience. Still, this wouldn't be needed if you just gave us the choice to say what's more valuable to us... brightness or battery life. Unfortunately, the choice you made for me was the opposite of what I would have chosen, hence the need for the return.