No luck here, even on the latest version.
I unpaired the watch, disabled everything I could think of, and can make it work by itself until.....
....I pair the watch back up, at which point if I'm wearing it while I sleep, the watch alarm will go off instead of the phone, if it's set to the bedtime alarm. It does show the message in the bedtime screen stating that will happen, after pairing the watch back to the phone, so that makes sense.
I have tried it as a "new watch," and from a backup.
This morning I verified that it is still sending a vibration alarm to the watch, as I was already awake when it went off, thanks to Alarmy.
The watch/phone didn't even care that I had been moving both around and was not asleep. It still buzzed the watch silently, and I still would have slept through that most days.
So no luck on the bedroom alarm yet, but thumbs up for Alarmy being free and working as intended. Unfortunately this is a bad fix, as a crash could cause the app to not fire or not be in the background, so it is not a good workaround for something that should really be properly fixed in the operating system itself.