Hi, merlofed.
I have solved the issue.
Here are the steps I took to pinpoint the problem.
1) I paired my watch with another iCloud account and the problem disappeared so it was obvious that the iCloud is the culprit.
2) I checked my iCloud storage to see in a detailed fashion.(in Iphone>Apple ID>Icloud>Manage Storage)
3) I realized that reminders is using 3,9GB which seemed odd.
4) I got on my Mac and found reminders app database(Mac>username>library folder>reminders)
5) I saw that 3 of my reminders which happen to be the only reminders with photo attached have been copied for each day I completed them. 3 photos were 52mb in size and they were repeated 75 days.
6) It was obvious this shouldn't happen.
7) I backed up all my reminders to a note in notes app via a shortcut(shortcuts app).
8) I deleted all reminders in all my devices that use the same iCloud account.
9) I removed all reminders app on all devices. I also removed the watch app on iPhone just to be sure.
10) I signed out of iCloud on all devices and waited for 15 minutes.
11) I turned off all devices and waited for 15 minutes.
12) I logged back in to iCloud in order(Mac > iPhone > iPad > Apple Watch)
13) I waited for several hours so that all data from iCloud servers to sync to my devices.
14) When all finished, my problem was gone.
Finally!
Some strange exchanges with Apple support:
ME: Can you offer me a solution?
Apple Support: No. Wait for an update.
ME: I have waited for 3 updates. How long should I wait?
Apple Support: Indefinitely.
ME: Is this even legal?
Apple Support: This is an extraordinary bug so you must wait.
ME: Shouldn't extraordinary conditions require extraordinary solutions?
Apple Support: We can't do anything that are not on our procedures.
ME: But your procedures don't offer any solution for the iCloud service I still pay on a monthly basis?
Apple Support: We apologize for the inconvenience.
ME: You make your users use a closed operating system and you cause a fatal error since there is nothing wrong with my watch's hardware. Shouldn't you take some sort of responsibility?
Apple Support: Our engineers are doing everything they can.
ME: Are you human?(yes I had to ask that at some point.)
Apple Support: Yes(uncanny valley style)
ME: Fine, I will solve this by myself.
Apple Support: Could you please let us know how if you solve it?
ME: Oh... the audacity!