Right, so at this point, essentially disabling Sleep settings for the watch completely, disabling nightstand, and disabling the alarm to be pushed to your watch, should allow for normal functionality of the alarm, in the sense of it shouldn't make the watch ring instead.
I personally have those disabled, no longer wear my watch to bed ever now, and also use alarmy (and make sure it's open in the background), so make sure I will be woken up.
I'm currently updating to 14.1 in the hopes that changes something, but I'll be sticking with my current settings (forcing everything watch related to sleep/nightstand/alarm off, unless AAPL does something about this.
One of the main reasons I bought the watch was for sleeping with it, so I feel rather let down that AAPL doesn't give us more control over these settings.
To some people, sleeping with a watch may not seem very important, and I understand that, however for some of us the ability to monitor sleep patterns is very beneficial. People that use CPAP machines, people checking their resting heart rate, people checking for disturbances from their partner's alarm/movement, people with animals that might be waking them up. A lot of these things can be picked up by the watch as movement and a change in heart rate, and can often be correlated to certain events, so it serves a purpose beyond seeming like a nifty feature.
I hope they bring back sleep monitoring and nightstand ability, with the option to always have alarms through the phone. It's as simple as making that an option.
AAPL coders, if you see this, all we need for complete functionality and choice is simply to make these two commands the last function of the chain in the alarm flow chart:
"Send All Alarms Set on Phone to Watch if Worn? (Yes/No)"
"Send All Alarms Set on Watch to Phone, if Watch is Worn? (Yes, No)"
"Only use Phone for ALL Alarms? (Yes/No) [toggling this would grey out the former two and lock all alarms to phone if chosen]"
That's pretty much it. Anything else is icing on the cake and could be useful to some, but the basic functionality should be straightforward.
People often use phones as alarms these days. You're taking one of the most important features used daily, and making it difficult to understand the logic behind the settings. Since you base AAPL around simplicity, offer those simple three choices I listed, and you've corrected the largest issue, as well as improving it from the original way.